Madrid approves €50m guarantee line for new-home deposits

On 4 November, Madrid’s cabinet approved a public guarantee line of up to €50 million for buyers of new homes. It backs early payments while a home is being built, but it is not a grant or money paid to buyers.

The line may back an advance of up to 10% of a home’s price. Madrid says it will cover up to 70% of each guarantee at no cost, while partner firms cover at least 30%. These firms are mutual guarantee companies, known in Spain as SGRs.

The line covers protected homes and homes sold on the open market. Buyers may be up to 50 years old with no income limit, and single-parent and large families have no age limit, the regional government says.

To take part, SGRs must be based in Madrid, meet financial rules and sign a deal with the regional Economy, Finance and Employment Department. Buyers cannot use the line until Madrid publishes the deal and partner SGRs join.

A separate programme can help after construction ends. Mi Primera Vivienda can fund at least 90% of a home’s assessed value when buyers take over the developer’s mortgage. It has run since 2022, and the two schemes can work together, but they cover different stages.

The separate programme can cover the full home value for buyers under 40. Its cap is 95% for buyers aged 40 to 45 and 90% for those aged 45 to 50. These percentages belong to Mi Primera Vivienda, not the new guarantee line.

The new line aims to ease the first cost of buying a home off plan. Buyers often pay part of the price to a developer or cooperative before the home is done. This line backs those payments; a buyer still needs a mortgage to buy the home.

Source: Idealista and ABC.