The government has approved the terms of a 2.5 billion euro loan guarantee program designed to help Spain’s ICO facilitate home purchases for 50,000 young people and families with dependent children. The guarantee would cover between 20 percent and 25 percent of the transaction value, the portion typically required by banks as the buyer’s contribution for a mortgage. With the guarantee, lenders would be able to finance the full purchase price, while buyers would only need to have saved 10 percent to cover ancillary costs such as taxes, notary, and registration. These are the eligibility requirements for accessing the aid.

Who is this measure aimed at?

The guarantees target young adults aged 18 to 35 and families with dependent children without any age limit. Applicants must prove living legally in Spain for the two years prior to the loan request. Those who already own another home cannot qualify for the guarantees, regardless of how the property was acquired. As an exception, individuals who own a fractional share of a inherited home may benefit. Likewise, those who own a home but cannot use it due to divorce, separation, or other circumstances beyond their control, or if the home is inaccessible because of a disability affecting the owner or household members, may qualify. The guarantees apply only to first homes in Spain, not second residences or investment purchases.

What is the maximum income to qualify?

The beneficiaries must have a maximum individual gross income of 37,800 euros per year (4.5 times the IPREM). If the home is purchased by two people, the income limit doubles to 75,600 euros. Additional adjustments depend on the number of children and whether the family is a single-parent household. Specifically, the limit increases by 0.3 times the IPREM (2,520 euros gross per year) for each dependent child, and in single-parent families the cap can rise by an extra 70 percent. The buyers’ net worth cannot exceed 100,000 euros.

How can the guarantee be requested?

The Ministry of Housing and the ICO will sign an agreement to implement and manage the guarantee line. Financial institutions active in the ICO mediation network can join the agreement. Prospective beneficiaries will be able to request a guaranteed mortgage through these banks once they have joined the agreement. The guarantee will be deemed granted at the same loan approval moment and carries no cost for either the beneficiary or the lender. The window for closing loans under this guarantee program ends on December 31, 2025, with the government reserving the option to extend by up to two more years.

How high can the loan amount be?

The loan guaranteed under the program can cover up to 100 percent of the lower value between the property appraisal and the purchase price. The government has earmarked 2.5 billion euros to guarantee 20 percent of 50,000 homes, implying an assumed average price of 250,000 euros per home. The final cap on sale or appraisal price will be set in the agreement between the Ministry of Housing and the ICO, and can be adjusted based on regional conditions, subject to the follow-up commission’s agreement.

What is the maximum guaranteed portion?

The Ministry of Housing will share up to 20 percent of the total principal of each mortgage with the lending institution on equal terms. If a loan enters default, the state will cover up to 20 percent of the losses. If the property carries a minimum energy rating of D or higher, the ministry may guarantee up to 25 percent of the loan principal. The guarantee lasts up to ten years, regardless of the loan term or any grace period. During this time, the home must be the owner’s primary residence. Leasing is limited to scenarios that require a move, such as marriage, separation, job relocation, or a better job opportunity, among others.