Regulatory relief by the Banking Supervision Department for Buyer’s Price projects
The mortgage for winners of Buyer’s Price projects will be set by market value of the dwelling, and not by the actual purchase price.
Further to discussions between the Bank of Israel and the Minister of Finance, a meeting was held at the Bank of Israel this morning with the participation of Bank of Israel Governor Dr. Karnit Flug, Supervisor of Banks Dr. Hedva Ber, and the Chairman of the National Housing Cabinet, Mr. Avigdor Yitzhaki. Following the meeting, with the objective of supporting the ability of winners to participate in Buyer’s Price projects, the Bank of Israel decided that the level of mortgages to those winning Buyer’s Price projects will be set according to the market value of the dwelling (via an adjustor’s assessment) and not according to the actual purchase price, provided that the buyer’s equity is no less than NIS 100,000, and the value of the dwelling is not more than NIS 1.8 million.
The Ministry of Finance will act to remove obstacles in connection with these dwellings, and will make it possible for banks to sell the dwellings of eligible parties in the open market, without any further limitations, should those parties not meet the mortgage payments.
Minister of Finance Moshe Kachlon: “This is big news for young couples who will purchase a home under the “Buyer’s Price” program. The decision will help young couples who do not have the equity currently required to make a significant step toward the dream of owning a home. Minister of Finance Moshe Kachlon and Chairman of the Housing Cabinet Avigdor Yitzhaki would like to thank the Governor of the Bank of Israel and the Supervisor of Banks for the effort in helping to solve the housing crisis.”
Supervisor of Banks Dr. Hedva Ber: “The Buyer’s Price programs are a significant cornerstone in the government’s efforts to assist the home buying public, and we therefore view it as correct to adjust regulations to the new programs in a manner that is consistent with the concept of limiting the risk to customers and to the banks.”