Romania slashes 2025 “New House” program budget by half

The Romanian government has drastically reduced the budget for the “New House” program in 2025, allocating only RON 500 million, a 50% decrease from last year’s EUR 1 billion fund. The program, which provides state-backed guarantees for home loans, aims to support first-time buyers and individuals who own a home smaller than 50 square meters.

Under the program, the state guarantees up to 60% of the loan value, with a minimum down payment of 5% for homes priced under EUR 70,000. If a borrower fails to pay installments for more than 90 days, the bank can request the state to cover the guarantee. However, a key limitation of the program is that beneficiaries cannot opt for a fixed interest rate, exposing them to potential market fluctuations.

Initially launched in 2009 as “First House”, the government-backed scheme has facilitated over 330,875 guarantees and guarantee promises for individuals securing financing for home purchases. Despite its benefits, the reduction in funding raises concerns about fewer approvals and increased competition for limited resources, potentially making homeownership more challenging for many aspiring buyers in Romania.