Guarantees for “First home” scheme diminished due to funds not being used

The Finance Ministry has decided to allocate a maximum of 700
million euros in guarantees for the “First home” programme, 30%
less than last year, as less than half the 1 billion-euro available
guarantees had been used by the end of December. The Government has
decided that the unused guarantees will remain available for
pre-contracts sealed before February 15th 2010, until the scheme is
modified so as to encourage the acquisition of new homes.
“The maximum guarantees made available for this year by the
Finance Ministry as part of the ‘First Home’ programme amount to
700 million euros,” said Finance minister Sebastian Vladescu.
In the last round of reallocation of guarantee funds for the
“First home” loans, several banks had their funds supplemented by
an overall 60 million euros, with beneficiaries including Alpha
Bank, Piraeus, Banca Transilvania, and Banca Romaneasca.
Analysts say that, apart from the psychological effect, the
“First home” scheme helped unfreeze mortgage loans and brought
about a relative stabilisation of prices on the real estate market.
BCR, the largest bank in the system in terms of assets, was
allocated a maximum 420 million euros for its guarantee fund last
year, which remained unchanged after January’s reallocation. BRD,
the second-largest bank in the system, also largely preserved its
level of guarantees at 250 million euros.