Whom is the KredEx housing loan guarantee designed for?

Young families

A young family is defined as a parent or parents raising a child up aged up to and including the age of 15. Legal guardians are also considered parents.

Young professionals

A young specialist is an up to 30-year-old (included) person, who has acquired secondary or vocational secondary education (based on basic or secondary education) or vocational education based on basic or secondary education, and meets one of the following conditions below:

• they have an employment contract or contract for services, or management board member contract, and the probationary period, if there was one, is over;
• they are assigned to a post according to the Public Service Act, whereas upon applicable probation period such a period shall be over;
• the individual is a sole proprietor registered with the commercial register or Tax Board, and must have been engaged in business for at least one year.

Tenants in restituted residential space

Tenants living in residential space restituted in the course of land reform include any of the following persons who had a residential lease at the moment that the property was restituted to its former owners:

• lessees
• the spouse of the lessee or the borrower’s domestic common law partner
• an adult member of the family residing with the lessee, with whom a loan agreement was concluded in connection with the death of the lessee
• adult member of the family of the lessee
• status as lessee may be certified by the lease or a certificate from the population register
• the lease must be valid at the moment that credit is applied for
• cohabitation with lessee may be certified by lease or certificate from the population register
• if residential space being used on the basis of the lease is not to be purchased, the borrower and the persons residing with the borrower must vacate the residence within 3 months of entering the loan agreement. A written agreement for terminating the lease and vacating the residential space must be concluded between the owner of the residential space, the lessee and all adult family members cohabiting with lessees.

What is a KredEx housing loan guarantee?

A KredEx housing loan guarantee is designed for people who want to take out a loan to buy a new home or renovate the existing one, and to decrease their down payment obligation. A housing loan guarantee allows you to buy an apartment, house, property or summer cottage. The objective of the property purchase must be to build a residence on the property and in the case of a summer cottage, to renovate it into a year-round dwelling.

What are the conditions for applying for a housing loan guarantee?

• self-financing (monetary) of a minimum of 10% of the value of the loan security
• the amount of the loan guarantee is up to 24% of the value of the loan security, but not more than EUR 19 200 
• there are no limits to the loan amount
• a term of up to 30 years
• a guarantee fee of 3% of the guarantee amount is to be paid upon signing the agreement, as a one-time payment
• upon the birth of a child, there is a grace period until the child reaches the age of 2. In the case of a child already in the family, the grace period also does not to exceed the child’s 2nd birthday.

The home to be purchased with a KredEx loan guarantee does not have to be the first home purchased, but only one KredEx housing loan guarantee can be in use at the same time.

The borrower must be the owner and user of the home to be purchased or remodeled. It is permitted to purchase a home as common property with a spouse or co-borrower.

What should I know about the value of real estate collateral?

The value of the collateral will be assessed by a bank-approved appraiser. The appraisal must have been conducted in the last 2 months. It is recommended that the appraisal be ordered from an appraiser certified by the relevant Estonian association governing the profession.

In the case of a first offering of new real estate to be developed, the acceptable upper limit of the price per square meter without an appraisal being required is:

• in the Kesklinn and Pirita districts of Tallinn, up to 1500 EUR/m²;
• in other areas of Tallinn, neighboring municipalities, and the cities of Tartu and Pärnu, up to 1000 EUR/m²;
• in other areas of the Republic of Estonia, up to 650 EUR/m².

What should I know about refinancing?

Refinancing is allowed if:

• you are buying a new home and refinancing an existing housing loan
• you already have a KredEx housing loan guarantee but you want to switch banks, using a KredEx guarantee at the new bank as well.

Refinancing is not allowed if you have an ordinary housing loan and you want to refinance it with a young family or young person’s housing loan from another bank. There is no amount cap on refinancing.

How and where to apply

To obtain a loan and an additional guarantee to a loan, contact one of the following banks (SEB Pank, Danske Bank, Nordea Pank, Eesti Krediidipank, Citadele Pank, Krediidipanga Liisingu AS, DnB NORD Pank, Marfin Pank Eesti). The lender bank will arrange the KredEx guarantee and the necessary later reporting.