Budapest Bankmonitor: New Rules for First Home Buyers with CSOK Plusz Loan

Published: November 27 2023

In Hungary, there are new rules for first home buyers with the CSOK Plusz loan. These rules clarify what qualifies as a first home and provide details on the down payment requirements and purchase limits for the property.

With the CSOK Plusz loan, first home buyers can now qualify for a loan with a down payment of only 10% instead of the usual 20%. This means that buyers can purchase an 80 million forint property with just 8 million forint in personal savings, and finance the remaining amount through the CSOK Plusz loan and potentially a market-based mortgage as well.

The new regulations state that the purchase price of the first home cannot exceed 80 million forints. To prevent manipulation of this limit, the property's appraised value cannot deviate from the purchase price by more than 20%. If the difference exceeds this threshold, the CSOK Plusz loan cannot be applied for.

According to the regulations, a first joint home is considered to be one where the spouses did not have joint ownership of a property in Hungary at the time of applying for or prior to applying for the loan. However, if each spouse individually owns a property, they can decide to sell those properties and purchase or build a new home using the CSOK Plusz loan. They can also choose to keep their individual properties and only the property purchased with the CSOK Plusz loan will be considered a joint property.

If the property does not qualify as a first home for the CSOK Plusz loan, the appraised value of the existing property must exceed the purchase price of the new home. Additionally, if the couple has sold their previous joint property within the last two years, the sale price must also exceed the purchase price of the new home. These regulations may create difficulties for families looking to move from urban to rural areas, where property prices are typically lower. However, many families choose to make this move in order to purchase larger properties for their children and enjoy a more comfortable lifestyle.

The new rules for first home buyers with the CSOK Plusz loan provide clarity on the definition of a first home, the down payment requirements, and the purchase limits for the property. These regulations aim to make it easier for families to buy their first home with more flexible financing options.

What is CSOK Plusz? CSOK Plusz is a housing subsidy program in Hungary that allows first-time home buyers to obtain a mortgage with a lower down payment.

What are the new rules for first home buyers with CSOK Plusz in Hungary? Under the new rules, first-time home buyers in Hungary can now obtain a mortgage with a down payment as low as 10% instead of the usual 20%. This means that they can purchase an 80 million forint property with only 8 million forints of their own savings.

What is considered as a first home in Hungary under the CSOK Plusz program? According to the new regulations, a first home refers to a property that is being purchased or built by a married couple who did not jointly own a property in Hungary at the time of their loan application or before. However, it is not a requirement for both individuals of the couple to not own any property individually. They can choose to sell their individual properties and purchase a new one together using the CSOK Plusz loan or keep their individual properties and only the newly purchased property will be considered as their joint first home.

Are there any price restrictions for the first home under the CSOK Plusz program? Yes, there is a price limit for the first home. The purchase price of the first home cannot exceed 80 million forints. To prevent manipulation of this limit, the government has set a requirement that the appraised market value of the property cannot deviate more than 20% from the purchase price. If the difference is greater, the CSOK Plusz loan cannot be applied for.

What happens if the property purchased with CSOK Plusz is not considered as a first home? If the property is not considered as a first home, the market value of the existing property must exceed the purchase price of the new home. Additionally, if the couple sold their previous joint home within the past two years, the selling price of the previous home must exceed the purchase price of the new home.

What are the benefits of the CSOK Plusz program for home buyers in Hungary? The CSOK Plusz program allows first-time home buyers to obtain a mortgage with a lower down payment, making it more affordable to purchase a home. This program also provides an opportunity for couples with individual properties to sell them and purchase a new home together, or keep their individual properties and only the newly purchased home will be considered as their first joint home.

Can the CSOK Plusz program be used for purchasing homes outside of Budapest? Yes, the CSOK Plusz program can be used for purchasing homes in locations outside of Budapest. This program aims to support homebuyers in various regions of Hungary, including smaller towns and villages, where property prices may be lower compared to the capital city.