If the family/single parent/widow has a child under the age of 1 born after September 1, 2021 at the time of taking the loan (in this case, the subsidy will be provided by the agency in the following amount: minus 3.5% of the refinancing rate set by the National Bank of Georgia, but no more than 6% in the amount of).
You may obtain a subsidized mortgage loan by presenting either salary or rent, money transfers or revenue from self-run enterprises.
Details and frequently asked questions about the subsidized mortgage loan program
About the program
- The program offers mortgage interest co-financing from the government over the course of 5 years.
Beneficiary of the program and conditions of subsidy are defined as follows::
- If the family/single parent/widow has a child under the age of 1 born after September 1, 2021 at the time of taking the loan (in this case, the subsidy will be provided by the agency in the following amount: minus 3.5% of the refinancing rate set by the National Bank of Georgia, but no more than 6% in the amount of), or
- A family/single parent/widow, if they have 3 or more children at the time of taking out the loan, have the option to join the program even after September 1, 2022 if they have a child or adopt a child after that date. In addition, if this type of borrower is already an active beneficiary of the program and enjoys the maximum limit of the program (200,000 GEL), he is entitled to use the program a second time, if he has and/or adopts 4 or more children after joining the program. In such a case, the borrower is entitled to take a loan in the amount of 200,000 GEL (in this case, the agency will provide a subsidy in the following amount: 1.5% minus the refinancing rate set by the National Bank of Georgia, but no more than 8%), or
- To a family/single parent/widow who at the time of taking the loan has a child whose adoption was carried out after September 1, 2021 (in this case, the agency will provide a subsidy in the following amount: minus 3.5% of the refinancing rate set by the National Bank of Georgia, but no more than 6 in the amount of %).
Additional mandatory provisions for the beneficiary
- If the beneficiary is a family, spouses must be officially married.
- The borrower (at least one spouse in case of a family) must be a citizen of Georgia.
- The borrower may have dual citizenship, but they must be a citizen of Georgia as well.
- The borrower may not be a citizen of Georgia only if their spouse is, regardless of whether or not the latter will be co-signing the loan.
- Only parents of an underage child/adopted child/stepchild are eligible for the program, provided the child is officially under 18 at the time of loan approval by the agency.
Purpose of the loan
- Acquisition/refurbishment of an apartment or house.
- Construction/refurbishment of a house.
- The loan may cover acquisition of non-residential property (e.g.: parking garage, basement) only if the borrower acquires it with the apartment/residential property.
Loans may be disbursed for the purpose of refinancing an existing loan obtained within this program (subsidized mortgage loans).
Eligible sellers
- An apartment may be acquired at a residential building constructed by a real estate development company;
- Private parties;
- The borrower may choose to construct a house independently.
Loan amount and currency
- Maximum amount of an eligible loan for the program is GEL200,000. However, actual value of residential property may exceed GEL200,000.
- If the value of property exceeds GEL200,000, provisions of the program will apply only to GEL200,000.
- Loans will be disbursed in local currency.
Restrictions and limitations of the subsidy program:
- If the borrower (both spouses, if the borrower is a family) is not a citizen of Georgia. In case of families, at least one spouse should be a citizen of Georgia.
- If the borrowing party or, in case of families, either of the spouses is an existing beneficiary of the Mortgage Support Mechanism program, approved on 25 June 2020 in accordance with resolution N387 of the Government of Georgia.
- No refinancing will be available for loans disbursed before 1 September 2021.
Subsidy shall be terminated under the following circumstances:
- Upon fulfillment of contractual obligations by the agency, commercial bank and the program beneficiary;
- Upon failure of the program beneficiary to fulfill the terms of an agreement with a commercial bank. Namely, if the borrower fails to make the scheduled minimum payment within 120 (one hundred and twenty) days of the due date and/or upon receipt of a writ of seizure;
- Upon pursuit of restructuring/refinancing of the loan in violation of provisions of the mortgage subsidy program;
- Upon annulment of mortgage registration;
- Upon violation of the loan purpose statute (use of funds for anything other than the actual purpose of the loan, such as acquisition/construction/refurbishment of a home, shall be considered as violation of the purpose statute);
- Termination of the loan agreement for any reason governed by the Georgian legislation.
Mandatory documentation to determine eligibility for subsidy:
- Certificate of marital status from the Public Service Development Agency;
- Marriage certificate;
- Child’s birth certificate;
- For parents of an adopted child, document of adoption (if available/applicable);
- For widow(er)s, death certificate of the spouse;
- For single parents, an official certificate of such status.
Sample interest rate calculation:
Interest rate for a family with 3 children that is eligible for subsidy in the amount of the NBG refinancing rate -1.5% up to 8% shall be calculated as follows:
- Refinancing rate as of 1 September 2021 is 10%.
- Let us assume that the bank offers an interest rate of 13%.
- State co-financing will amount to 10$-1.5%=8.5%. However, since the subsidy shall not exceed 8%, only 8% will be subsidized.
- The borrower will be expected to pay annual interest in the amount of 5% (for a loan with 13% interest rate minus subsidy of 8%) for 60 months.