State guarantee

If you are unable to provide on your own the guarantees required by a financial institution for the financing of your home construction, purchase, or improvement project, the State can assist in guaranteeing your loan.

Conditions

1. to qualify you must have had a home savings account with a single banking institution for at least 3 years or, failing that you must have saved regularly for at least 3 years, provided that you opened the account in question with an initial deposit of at least 240€ and that you subsequently made regular annual deposits of at least 290€

2. your monthly loan repayments may not exceed 40% of your disposable income

3. you must have obtained a loan from a financial institution corresponding to at least 60% of the amount to be invested. The State guarantee concerns that part of your loan exceeding 60% of the amount to be invested but may not exceed 30% of the total cost.

4. the maximum interest rate charged by the financial institution may not exceed 10%

Maximum amount

The State guarantee cannot exceed 127,890€ in terms of the 2010 mean annual cost of construction index of 682.08.

Procedure to obtain a State guarantee

Your financial institution should submit the application for a State guarantee to the "Service des Aides au Logement du Ministère du Logement (Housing Benefits Department of the Housing Ministry)" using a multipurpose form covering all State subsidies and benefits for individual private housing.

Source : www.logement.lu, Date : 19.05.2011, internal translation