Public guarantee when purchasing your 1º home

When you request a real estate loan there are several factors that influence the bank to finance, with 90% being the maximum limit of the value of the property lent by banks for your own and permanent home.

With this new Government measure, 100% financed real estate credit becomes possible. The State’s public guarantee may reach up to 15% of the value of the property, covering the amount that is not financed by banks.

This guarantee works as a type of guarantor: in case of default in paying the loan, the State covers this amount temporarily, but the borrower will have to return it later. The measure has been in force since September 28, 2024.
Important:

Some of the contours of these measures are not yet known, namely the participating banks and the maximum global amount of the guarantee, which will be distributed among the banks.

On July 11th, a Decree-Law came into force with the conditions for granting the public guarantee for youth real estate credit. At the end of September 2024, Ordinance No. 236-A/2024/1 was published in the Official Gazette, which establishes the conditions for granting the public guarantee for youth housing credit. This regulation was promulgated by the Ministries of Finance, Housing and Youth, and defines the eligibility criteria and rules for using the guarantee.

How to benefit from this measure?

There are some mandatory criteria that you must meet to secure full financing:

Age: Between 18 and 35 years old, with tax domicile in Portugal.

Income: Annual income cannot exceed the 8th income tax bracket, that is, 81,199 euros per year (approximately 5,800 euros per month).

Ownership: The contract holder cannot own any urban building or residential unit.

Previous benefits: The young person cannot have previously benefited from public guarantees from the State for the purchase of housing.

Property value: The value of the property cannot exceed R$350 thousand (initially established value), with the possibility of exception for properties worth up to R$450 thousand in regions with greater urban pressure.

Guarantee limit: The State’s public guarantee cannot exceed 25% of the value of the property transaction.

But be careful, even if you comply with all the previous criteria, to take advantage of this government measure you must take into account that your effort rate does not exceed 50%, that is, the amount to be paid to the bank must not exceed more than half of your income. You should also take into account the maximum loan repayment period depending on your age.