The National Bank of Serbia (NBS) announced that at an extraordinary meeting of the Executive Board, new regulations were adopted, paving the way for the implementation of the state mortgage lending program for young citizens. According to the NBS representatives, these bylaws establish a clear regulatory framework, which is necessary for the implementation of the announced support measures for the purchase of the first home.
Under this program, it is planned to reduce the minimum down payment to 1% of the estimated value of the property, instead of the usual 10-20%. Studies conducted by the NBS have shown that such a measure is acceptable from the point of view of bank risk management, as the state is ready to provide guarantees and more favorable credit terms for this portfolio of mortgages.
In addition, banks are allowed to use the “loan to value” (LTV) indicator at the level of 99%, i.e. the borrower will only need to own 1% of the value of the apartment to be purchased. Also, financial institutions will have access to a reduced risk-indicator of 35% of the total amount of mortgage debt under the new program – this should encourage banks to more actively participate in granting loans to young buyers.
The NBS emphasized that the innovations will be useful both for borrowers, who get access to more affordable conditions for buying housing, and for the banks themselves, which are simplified the procedure for calculating risks. According to the official statement, the adopted regulations will enter into force eight days after the publication in Sluben Glasnik, and the implementation of the program can begin almost immediately, with the support of the guarantee mechanism from the Serbian government.
Source: https://news.relocation.rs/ipoteka-dlya-molodyh-v-serbii-nbs-snizha/
