These are the Government's loans to help young people pay the down payment on a home.

BarcelonaThe Catalan government presented this Tuesday the details of its flagship measure to facilitate access to housing for young people: an interest-free loan to pay the down payment, one of the obstacles that hinders this group's ability to access property. The loans will have a 0% interest rate, cover up to 20% of the property's value—with a maximum of €50,000—and do not have to be repaid until the mortgage is paid off, with a maximum term of 30 years. The government will allocate €500 million over five years (2025-2029), with €100 million each year, through the Catalan Housing Agency (AHC).

This line, called Emancipation Loans and set to open on June 30, was previously announced and is part of the Catalan government's plan to increase social housing in Catalonia, as apartments and houses purchased with this instrument will become permanently protected housing. This means that if the property is sold after a few years, the price will be limited to the purchase price, plus inflation and the cost of certain renovations. From the fourth year onwards, it will be available for rent with AHC authorization and at a price lower than 80% of the reference rental price index.

The loans will be complemented by mortgages equivalent to 80% of the property's value, provided by the banks participating in the program: Arquía, Banco Sabadell, Bankinter, BBVA, CaixaBank and Imagin, Caja Ingenieros, Caja Guissona, and Laboral Kutxa—and perhaps also Banco Santander, with which Banco Santander is partnering. "The goal is to create a partnership between the public and private sectors where the public sector doesn't reach. By combining the two initiatives, we could reach more beneficiaries," explained the Regional Minister of Economy and Finance, Alícia Romero, at the press conference launching the program on Tuesday, accompanied by the Regional Minister of Territory, Housing, and Ecological Transition. "It's a measure that facilitates access to a first home, since our age of emancipation is the latest in Europe," added Paneque. Considering that the annual budget is 100 million euros and the maximum aid will be 50,000 euros, Paneque emphasized that it could reach up to 2,000 young people per year. Furthermore, this means that, if implemented, 2,000 protected apartments would be added to the market each year.

The requirements for accessing them

Applications for the emancipation loan can only be made by people registered in Catalonia who are between 18 and 35 years old, inclusive. Furthermore, these individuals cannot own any property, and the property to be purchased must become their primary residence. The property may be new or secondhand, but not a property already classified as protected. If the loan does not cover 100% of the purchase price, the buyer must provide the remaining amount with their own resources.

Furthermore, the applicants' income may not exceed the Catalan income sufficiency indicator (IRSC) multiplied by five. For example, a single buyer may not earn more than €80,963.31 per year, and a two-person buyer may earn more than €83,467.33. If the buyer exceeds this limit years after formalizing the purchase, there will be no consequences.

Those interested in this measure will be able to apply for the loan starting June 30 through the Catalan Institute of Finance (ICF). If their request is approved, the ICF will direct the young people to one of the entities adhering to the agreement to apply for the mortgage.

Another step to encourage purchasing

This government measure goes beyond the mortgage guarantee scheme approved a year ago, also to encourage homeownership for those under 25. This scheme sought to allow banks to finance 100% of the home, providing the usual 80% and also the 20% that the buyer normally contributes as a down payment, which will be guaranteed by the state. This measure could have limited and unintended effects, according to several sources. papers who have studied these types of measures, concluding that they end up benefiting homeowners the most because they cause prices to rise.

"We were talking with several stakeholders, and with this design, once you have these resources, you can't speculate later and the price is limited," explained Paneque, when asked about these possible effects.