The NBS Head Office Building was built from 1888 – 1890, on the basis of blueprints designed by Konstantin Jovanovic (Vienna 1849 – Zurich 1923), son to distinguished artist Anastas Jovanovic...
23/12/2024
At an extraordinary meeting on 20 December 2024, the NBS Executive Board adopted regulations coming under the NBS’s remit to support the implementation of the Government’s Youth Housing Loan Programme.
Namely, the proposed Youth Housing Loan Programme which is about to be finalised envisages, among other things, that the minimum down payment by a bank client may amount to 1% of the value of the real estate. After conducting in-depth analyses of the ways in which it is possible and justified to ease housing loan conditions and quantifying the potential modalities for the Government’s youth support programme, the NBS estimated that the reduction of the mandatory minimum down payment (from 20% or 10% to 1%) is justified even from the viewpoint of adequate and prudent risk management by banks, as more favourable conditions and guarantees of the Republic of Serbia will be provided for the portfolio of youth housing loans approved under this programme.
In this regard, the NBS adopted bylaws in order to timely set up an appropriate regulatory framework for the implementation of the proposed government programme. Namely, when approving loans under this programme, banks may apply the so-called LTV limit of 99% (meaning that the client can make a down payment of 1% of the real estate value purchased under the loan). In addition, banks may apply a lower risk weight (35%) to the entire exposure under a housing loan approved within the Youth Housing Loan Programme to first-time home buyers.
The above amendments create a framework which provides incentives both to borrowers, through minimum participation in financing the real estate, and to banks, through the application of a lower risk weight to housing loans included in the programme.
The above regulations will enter into force eight days from their publication in the RS Official Gazette. They will therefore come into effect immediately after the launch of the Youth Housing Loan Programme supported by the guarantee scheme of the Government of the Republic of Serbia.
Governor’s Office
