Program launch and scale
In 2023, the Spanish authorities announced the launch of a new initiative aimed at supporting citizens with the purchase of their first home. The program offers government guarantees covering up to 20% of the mortgage amount. A total of €2.5 billion was allocated for this project, with the main goal of making home ownership more accessible for young people and families with children.
Implementation and yearly statistics
However, a year after applications began, the results have fallen far short of expectations. During this time, banks signed only 7,887 mortgage contracts using state guarantees. This represents just 7.8% of the total funds allocated for the program. Despite the substantial budget, demand for this kind of support has been extremely low.
Reasons for low demand
Experts attribute the program’s failure to several factors. First, the eligibility requirements are quite strict. Only citizens under 35 or families with underage children can apply, and annual income must not exceed €37,800 per person. If the property is purchased jointly, the limit is doubled, but the combined income of both buyers may not exceed the set threshold.
Secondly, obtaining the guarantee involves a complicated bureaucratic process. First, a mortgage agreement must be signed, and only after that can an application for state support be submitted. As a result, banks are forced to assume all risks until the guarantee is approved, which reduces their interest in such transactions.
Market reaction and prospects
Real estate market participants note that due to the complexities of the process and the limited number of eligible applicants, the program has not achieved widespread adoption. Many potential homebuyers either do not meet the criteria or are not willing to go through the lengthy approval process. As a result, a significant portion of the allocated funds remains unused, and the goal of expanding access to housing for young people and families with children has yet to be achieved.
