Start loans

Both The Housing Bank and private credit institutions can provide basic loans.

Start loans represent a supplementary financing to either one, which can be used when necessary to facilitate someone’s entry into the housing market. Start loans are particularly intended for those entering the housing market for the first time and who have difficulties in obtaining affordable, private financing. However, start loans may also be used for other medium- and low-income households with special needs. Loans are distributed from the Housing Bank to municipalities who in turn give loans to individuals. The start loans thereby become a tool for the implementation of the municipalities’ housing policies.

The municipalities and the Government share the credit risk on the Start loans, respectively with 25 and 75 pct of the residual loan. Interest rates and repayment terms on funds from The Housing bank correspond with general terms for loans from the Housing Bank (see below). However, each municipality can determine the terms of payment on the loans they offer. The municipalities gave start loans to about 7 000 households during 2004, out of which almost 45 pct were first-time home buyers. Many single households and single parents financed their first home by means of a startloan.