The Portuguese government has announced an increase in the maximum public guarantee for real estate credit by 350 million euros, as per an official directive signed by Minister of State and Finance Joaquim Miranda Sarmento on September 18 and published on Wednesday.
In addition to this increase, the directive also approved a request from BPI for an additional 100 million euros on the previously allocated amount.
Furthermore, Caixa de Crédito Agrícola Mútuo de Mafra has requested an additional 1.8 million euros.
The directive emphasizes that the approval is a “necessary condition to enable participant institutions that have exhausted the initially assigned guarantee limit to continue with the measure intended to facilitate granting housing credit to young individuals.”
The public guarantee for housing credit is aimed at individuals aged up to 35 and applies to contracts signed until the end of 2026. It allows the State to act as guarantor up to 15% of the transaction value.
The government has set a maximum guarantee amount of 1.2 billion euros, distributed among various banks, but provisions are made for increasing this amount if the banks exhaust their quotas and request additional funds, as is currently occurring.
In effect, by combining this guarantee with housing credit rules, the measure enables young people to secure 100% of the home’s valuation, as opposed to the standard 90% limit for general clients.
Eligible individuals for this guarantee must be aged between 18 and 35 and purchasing their first permanent residence valued no more than 450,000 euros.
Beneficiaries cannot own any urban property or urban property fractions and their income must not exceed the eighth IRS bracket, approximately 81,000 euros in annual taxable income.
Data released by the Bank of Portugal at the end of August indicated that the public guarantee covered 13,200 credit contracts up to July, accounting for 38.7% of all contracts issued to individuals up to 35 years old.
