Index - Economy - MNB Warning: We may not be able to get ultra-cheap green loans with prior agreement

Index – Economy – MNB Warning: We may not be able to get ultra-cheap green loans with prior agreement

Customers who choose an apartment that is currently under construction and where property developers enter into a pre-purchase agreement with buyers instead of a purchase agreement will not receive a Green Home loan. According to the terms and conditions applied by the banks providing financing under the FGS Green Home Loan Program (ZOP), the mutual intent of purchase and sale included in the prior agreement is not sufficient to conclude a loan agreement, similar to other housing loan products.

In light of the huge interest in ZOP and the fact that a large percentage of properties are eligible for the loan still under construction (or even before construction), It is important for home buyers to realize that if they purchase properties with a pre-purchase agreement, they have to take into account the risk that the degree of completion of the property (or the practice of contracting with the investor) will allow the final sale to exhaust the ZOP budget of HUF 200 billion. In this case, the central bank warned about the possibility of obtaining a green home loan from the FGS and the availability of government family home interest rate support (“green throttle”).

All this means, therefore, that those who want to ensure that they get a very cheap Green Home loan at an interest rate of 2.5 percent, have to sign a sales contract with the seller, even for a home under construction. This is the only way to conclude a loan agreement in the program and thereby “fix” the terms of the ZOP and the “green choke”.

There is no question of raising the frame

In the professional material sent to money.hu, the Financial National Bank (MNB) considered it important to emphasize that the Monetary Council makes a decision on the development of targeted monetary policy instruments, including the possibility of continuing ZOP, taking into account existing macroeconomic and lending operations. Thus, at the moment, no opinion about the subsequent increase in the envelope of the green loan program of HUF 200 billion can be considered justified. It seems that the very fact that the MNB draws attention to the omission of pre-contracts, as a result of which the owners of completed apartments subsequently may not come to very cheap loans, is a refutation of the increase in the framework. But, of course, the decision rests with the monetary council of the Central Bank. At the moment, it is known that by the end of December 2021, banks concluded contracts with their customers worth about 22 billion HUF in 753 stores under ZOP, which is 11 percent of the available budget. After the interest rate hike by the central bank continues in the first months of this year – even if it announced an interest rate of 4 per cent in the deposit tender on Thursday as it was last week – so too are the homes available with the green home loan There will increasingly be alternatives to used housing.

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Is it possible to sign a final contract for something that has not yet been done?

According to PwC’s legal expert material for Réti, Várszegi és Társai Law Office, a relatively new ruling by the Szeged Governing Council (Gf.30.111 / 2020/11.) is at the start of the process, so a pre-contract will not necessarily be necessary.

In the case of the final contract, the position of customers is more favorable, since it must contain all relevant conditions under which the buyer can demand performance from the seller on the spot. However, the problem may be that the final contract will not be able to enforce the fitness requirements more effectively than the pre-contract. Furthermore, since the house/apartment you wish to purchase did not exist yet at the time the contract was entered into (it does not have a topographical number or title deed), we cannot submit it to the Land Office despite the contract being entered into. Final sale contract. Thus, this treaty does not protect us in the event of expectation of exclusivity and legal regime such as a prior contract.

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