This means that the minimum down-payment required in the periphery will be about NIS 60,000
Further to an appeal by Minister of Finance Moshe Kahlon to Supervisor of Banks Dr. Hedva Ber, data provided by the Head of the National Housing Directorate in the Ministry of Finance Avigdor Yitzhaki show that for homes purchased in the periphery, the requirement for customers to pay NIS 100,000 from their own funds leads to a situation in some cases where the purchaser’s own funds plus the grant constitute a relatively large portion of the price of the dwelling.
Based on these data, and with the aim of continuing to strengthen communities in the periphery, the Banking Supervision Department decided to accede to the Finance Ministry’s request and to amend the Directive. Under the amendment, in 30 localities in the periphery where a grant is given to home buyers within the Buyer’s Price program, the bank will be able to allow purchasers to pay NIS 60,000 of their own funds, such that the purchaser’s own funds plus the grant will total NIS 100,000 or more. The amendment will come into effect in December 2017.
In May 2016, the Banking Supervision Department instituted regulatory leniencies regarding housing loans to those eligible for the Buyer’s Price program, based on which, for the purpose of calculating whether the loan falls within the LTV limitations, the bank is permitted to calculate the loan’s LTV ratio based on an assessor’s evaluation rather than the actual purchase price, provided that the purchaser pays at least NIS 100,000 of his own funds.
Supervisor of Banks Dr. Hedva Ber said that, “We see it as proper to assist customers in the periphery, and we decided to recognize the special grant that they receive from the State as part of their down-payment. As such, we adjusted the Banking Supervision Department’s requirements for a customer purchasing a dwelling in the Buyer’s Price program in a way that does not increase the risk in the banks’ housing credit portfolio or the customers’ ability to meet the loan repayment.”
Head of the Housing Directorate Avigdor Yitzhaki said, “We remain attentive to the needs of the Buyer’s Price program winner, and are trying to make things as easy as possible for them on the way to their first home. Following a number of meetings that Minister of Finance Moshe Kahlon held with Buyer’s Price winners in the periphery, we were made aware that the minimum down-payment required can sometimes be an unjustified barrier to purchasing a home. I am pleased that the Banking Supervision Department acceded to our request to continue making things easier for young couples.”
The following is a list of the localities where a grant is currently given pursuant to the instructions of the Accountant General:
List of localities eligible for the grant, as of March 16, 2017:
The list
is up-to-date in accordance with the marketing plans of the Israel Land
Authority and the Ministry of Construction and Housing.