The Start-up Loan Scheme

This report examines the use of written guidelines for start-up loans and practice in Norwegian municipalities.

The Start-up Loan Scheme (Startlån), administered by the municipalities on behalf of the Norwegian State Housing Bank (Husbanken), is aimed at those who are unable to finance a property using private financial institutions. The loan is intended to give households lacking capital the opportunity to buy their own home, or improve their current home.

Start-up loans are not legally required in the municipalities, but the vast majority of municipalities are using these loans today. Beyond some general requirements from the governments, the guidelines are in most areas relatively vague or open to judgment. Therefore, 61 percent of municipalities have chosen to have their own written policies.

The main impression is that local written policies often do not prioritize target groups. Hence, the municipalities’ practice is to a greater extent regulated by the bureaucrat involved in the start-up loan applications. We have in our survey documented a wide range of local authorities' practice of prioritizing among eligible groups and considerations made about ability to pay and mortgage terms and conditions (such as repayment period and fixed or floating interest rate).

Proba-report 2012 – 07.
The report is written by Lars-Erik Becken. Contributions by Synne Klingenberg and Audun Gleinsvik.

Extended summary of the report in English. 

The whole report “Kommunenes retningslinjer og praksis for startlån”