The Institut Català de Finances and the Agència de l’Habitatge de Catalunya are offering two types of loans with preferential conditions to promote and finance the construction and acquisition of social rental housing. The line of credit for financing the acquisition of housing has a budget of €110 M and will allow municipalities, non-profit entities and the third sector to acquire social rental housing. The loan for construction, with a budget of €140 M, is aimed at developers and will serve to increase the pool of social rental housing with the construction of 1,000 new homes.
The Institut Català de Finances (ICF) and the Agència de l’Habitatge de Catalunya (AHC) will allocate 250 million euros to social housing, in line with the strategic objectives of the Government of the Generalitat to increase the availability of social rental housing, improve the access roads to housing with the construction and rehabilitation of the social housing already built, and improve the response to emergency situations.
In this respect, the Institut Català de Finances (ICF) and the Agència de l’Habitatge de Catalunya (AHC) are providing two types of loans with preferential conditions to finance the construction and acquisition of social rental housing.
During the presentation ceremony, the Vice President of the Government and Minister of Economy and Finance of the Generalitat, Pere Aragonès, emphasised that the importance of these two types of loans “lies in the fact that they will guarantee the availability of public housing for social rental over a long period”. The head of the Generalitat’s finances considers that the Government’s economic policy must be “in keeping with the needs of the people” and based on social investment. “We believe that the financing has to be at the service of society and not vice versa. That is why the role of the ICF is important; in cooperation with the AHC, it must be in a position to help achieve these objectives and cover the current deficiencies in society”, he added.
The Minister of Territory and Sustainability, Damià Calvet, explained that these lines of credit “are part of one of the Government’s strategic objectives in terms of housing, which is to increase the availability of public housing”. “We are aware of the problems and we aim to act from the outset to achieve more public housing, to improve access to housing, to offer more institutional support to the construction and rehabilitation sectors, to provide more institutional cooperation and to respond to evictions”, he indicated. For the head of Territory and Sustainability and the head of the Government in matters of housing, “the method of pre-emption in achieving social housing offers us an opportunity that we cannot afford to miss, nor would we wish to, as we are aware of the challenge we face and we need to take immediate measures”.
The presentation ceremony was also attended by the ICF’s CEO, Josep-Ramon Sanromà, and the director of the AHC, Jaume Fornt.
1,800 new homes for Catalonia’s public housing pool
The loan for financing the acquisition of houses, with a total of 110 million euros, is to be made available to local authorities, non-profit and third sector bodies, and social developers. The aim is for these entities to acquire housing that will be used for social rentals. It is estimated that this loan will allow 1,800 homes to be added to the social rental sector in Catalonia.
In the coming months, it is expected that financial institutions will put a large part of their housing stock up for sale. Current legislation allows the AHC to exercise its right to pre-emption and to acquire them before they are placed on sale, and then offer them to third sector bodies and social developers. These operations, which are carried out individually at considerably reduced prices, represent a unique opportunity to significantly increase the social rental housing pool.
For its part, and in accordance with the framework agreement signed between the ICF and the AHC, the entities that acquire these houses must first allocate them to situations derived from the emergency committees. In this case, the tenants will pay only 30 euros per month. When incomes are below 1.86 times the Income Sufficiency Indicator (IRSC), the Generalitat will subsidise the difference between the 30 euros of monthly rent and the cost of repaying the loan. If there are no people in these situations, the homes may be allocated to social rentals for other groups in need in the municipality.
This line is committed to the temporary ownership formula associated with the loan received. Under this system, the entities will own the property for 75 years, after which it will become part of the public housing pool of the Generalitat.
1,000 new homes for the social rental pool in Catalonia
In April, the ICF and the AHC also activated a line of credit for the construction of social rental housing endowed with 140 million euros for private developers and public developers (town councils, county councils, etc.). The houses must be built in one of the 152 municipalities with an accredited strong demand according to the Territorial Sectorial Housing Plan.
These loans will be used to expand the public social rental housing pool in Catalonia, as they will allow the building of 1,000 new homes with an average size of 70 m2 and a maximum rent of 450 euros per month.
Loans with preferential conditions
Under the framework agreement for both these types of loans, the ICF will provide the resources and analyse and manage the loans and the AHC will issue an eligibility report. The loans will have a fixed interest rate to which a partial discount will be applied by the AHC, in the case of eligibility. The maximum repayment period will be 25 years with the possibility of a grace period of up to two years included.
Applications for these loans - ICF Social Housing (developments) and ICF Social Housing (acquisition) - can be made through the ICF platform www.icf.cat
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