Housing loan guarantee

Open

Purpose

The housing loan guarantee is meant for people who desire to take a loan for buying or renovating housing and seek to reduce their down payment obligation. The housing loan guarantee makes it possible to buy an apartment, house, plot of land or summer cottage. In such a case, the purpose of buying a plot must be the construction of a private house and, in the case of a summer cottage, renovation of the summer cottage for year-round living.

Benefits

  • The KredEx guarantee allows a loan to be obtained with 10% self-financing.
  • With at least 10% self financing, there is no need to use additional collateral.

For who?

Pere logo

private and family

Service is suitable if

  • you want to buy a home
  • you want to build a home
  • you want to reconstruct your existing home
  • you have no additional guarantee and wish to reduce the initial home loan contribution

Important conditions

Essential terms and conditions
  • To apply for a KredEx housing loan guarantee, please contact a bank, as both the loan and the guarantee can be applied for through the bank. There is no need to contact KredEx separately.
  • At least one loan applicant who wishes to use the KredEx housing loan guarantee must belong to a target group of loan.
  • Self-financing is at least 10% of the collateral value. Self-financing of the target group of a family with many children may be at least 5% of the collateral value.
  • The amount of a loan guarantee is up to 24% of the collateral value, but not more than EUR 20,000. For the target group of people buying an energy-efficient housing or renovating housing to improve energy performance, the amount of the loan guarantee is up to EUR 50,000. For the target group of a family with many children, the amount of the loan guarantee is up to 40%, but not more than EUR 50,000.
  • For the target group of a buyer or renovator of housing in a rural area, the amount of collateral is up to 80% of the outstanding principal amount of credit, but not more than EUR 80,000 (eighty thousand). A mortgage shall be established in favour of the foundation over the collateral of the credit granted for buying or renovating housing in a rural area.
  • There is no upper limit on the loan amount. As an exception, the maximum loan amount for the target group of a buyer or renovator of housing in a rural area is EUR 100,000.
  • The guarantee fee (3% of the guarantee amount) is paid upon the conclusion of the contract as a single payment. The guarantee fee for the target group of a family with many children is 2%. For the target group of a buyer or renovator of housing in a rural area, the guarantee fee is 1% of the guarantee balance per year, payable monthly until the end of the guarantee contract.
  • In the event of both the birth of a child and for an existing child, a grace period may be granted until the child reaches the age of three.
  • Terms and conditions of a repayment schedule of a loan longer than 30 years:
    • the age of borrowers upon maturity does not exceed 70 years, and
    • the collateral has been completed or completely renovated within the last 10 years.
  • People in the target groups of a young family, young specialist, buyer of an energy-efficient housing, forced tenants and veterans can use the guarantee if they do not own housing at the time of applying for the loan. An exception is where the borrower undertakes to transfer the existing housing within 12 months as of the purchase of the housing with the guarantee.
  • Only one KredEx housing loan guarantee can be used at a time.
  • The owner and user of housing to be bought or renovated must be the borrower. Housing may be bought into common ownership with a spouse or co-borrower.

 

Good to know

  • Assets purchased using the guarantee may not be rented out
  • Application for the guarantee takes place through a bank
  • The property that serves as collateral must be insured

Application process

Young family target group

A young family consists of

  • a parent up to and including 35 years of age raising a child up to and including 16 years of age, or
  • a parent up to and including 40 years of age raising at least two children up to and including 16 years of age.

A parent is either

  • a single parent of the child, or
  • parents together, or
  • one parent separately, or
  • both parents separately, or
  • a guardian.

Proof of belonging to the target group can be provided by the following document:

  • a copy of the child's birth certificate or birth registration, or
  • extract on the children from the portal www.eesti.ee.

The extract (and, in the case of a guardian, also a relevant decision) must be forwarded to the e-mail address provided by the bank.

 

Young specialist target group

A young specialist is a person up to and including the age of 35 years who has acquired higher education, secondary specialised education or a vocational secondary education (on the basis of basic education or secondary education), and who meets at least one of the following conditions:

  • an employment contract, service agreement or management board member’s agreement has been signed with the person, and if a probationary period is applied, the probationary period must have ended;
  • The person has been appointed to a position on the basis of law, and if a probationary period is applied, it must have ended;
  • The person is registered in the Commercial Register or with the Tax Board as a sole proprietor (FIE), and has operated as an entrepreneur for at least one year.

 

Target group of people buying energy-efficient housing or renovating a home to increase energy performance

Requirements for energy-efficient housing

Requirements for energy-efficient housing

Proof of belonging to the target group can be provided by the following document:

  • construction or renovation of a residential building – a) an energy performance calculation demonstrating the class of energy performance indicator to be achieved, as set out in the building design at the basic project stage (whereas the building design and the energy performance calculation must have been carried out by a person who corresponds to the conditions set out in the applicable legislation); or b) an energy performance certificate demonstrating the class of energy performance indicator, entered in the register of construction works and that is based on the energy performance calculation;
  • buying a residential building or an apartment – a valid energy performance certificate proving the class of energy performance indicator.

 

Target group of a family with many children

A family with many children consists of at least three children up to and including the age of 19 together with either

  • a single parent, or
  • parents together, or
  • one parent separately, or
  • both parents separately, or
  • a guardian.

Proof of belonging to the target group can be provided by the following document:

  • copies of the birth certificates or birth registrations of children, or
  • extract on the children from the portal www.eesti.ee.

The extract (and, in the case of a guardian, also a relevant decision) must be forwarded to the e-mail address provided by the bank.

 

Target group of a buyer or renovator of housing in a rural area

A buyer or a renovator of housing in a rural area is a natural person who buys housing, or

renovates housing owned by him outside the following settlement units:

  • Cities and small towns in Harju County, except Ardu, Habaja, Loksa, Rummu and Ämari
  • Rural municipalities adjacent to Tallinn
  • Cities and small towns in Tartu County, except Alatskivi, Kallaste, Rannu and Rõngu
  • City of Haapsalu as a settlement unit
  • Kohila small town
  • Kuressaare as a settlement unit
  • Paikuse small town
  • City of Pärnu as a settlement unit
  • City of Rakvere
  • City of Rapla as a settlement unit
  • Sauga small town
  • City of Viljandi

 

Target group consisting of Defence Forces or Defence League veterans

Veterans or persons who have been in service in the defence Forces or Defence League, who have been on a foreign mission or being injured while in service in Estonia.

 

Target group consisting of tenants living in residential space returned to its pre-war owners

Tenants residing in residential space returned to pre-war owners include the following individuals who have lease agreements in residential spaces that were illegally expropriated by foreign regimes and restored to their owners in the course of property reform:

  • tenant
  • the tenant’s spouse or common-law domestic partner
  • an adult family member who lived with the tenant and with whom a loan agreement was entered into in connection with the death of the tenant
  • an adult family member of the tenant
  • Tenancy status may be substantiated with a certificate from the Population Register or by the lease agreement
  • The lease agreement must be valid at the moment at which the credit is applied for
  • cohabitation of a family member may be substantiated with a certificate from the Population Register or by the lease agreement
  • If the residential space used on the basis of the lease agreement is not being purchased, the borrower and persons residing with the borrower must vacate the residential space within three months of the conclusion of the loan agreement

The owner of the residential space, the tenant and all adult family members residing with the tenant must enter into a written agreement for termination of the lease agreement and vacating of the residential space.

To apply for the housing loan guarantee, contact a bank. The bank will organize the guarantee and later reporting.

Contact us

Kristo Hütt

Kristo Hütt

Client Manager

kristo.hutt [at] kredex.ee
Aire Oolup

Aire Oolup

Client Manager

aire.oolup [at] kredex.ee