Loans available to first-time buyers

What loans and grants are available to first time buyers in France? Is there something extra for buying new build?

Since 2005, the French Government has offered assistance to first time buyers in the form of a prêt à taux zéro (interest-free loan) for those wishing to purchase their main residence. This was introduced to increase levels of home ownership and aid people on low incomes whose preference is to purchase rather than rent.

Different thresholds are set depending on the region and the number of residents and higher amounts are available to encourage buyers to purchase a new property.

This is further encouraged by reduced notaire’s fees for the purchase of properties under three-years-old (about 3% instead of 7.5%). These loans are available to any French resident paying taxes in France, as long as they fulfil all the criteria laid down by the government.

For more information contact any bank or mortgage lender or see an online guide such as http://www.meil leurtaux.com/savoir/guide/pret_ taux_zero.php

However, if this sounds too good to be true, be aware that this loan is not designed to replace a standard mortgage.

It is intended to give a helping hand with the personal contribution, which for those starting out in the workplace or with a low income can be difficult to raise.

Maximum loan amounts vary depending on several factors but are never higher than 40% of the value of the house, so if you think you could be eligible, research other avenues too as you will still need a way of borrowing the remainder.

It is nevertheless an innovative scheme and with thresholds and amounts available having been in some cases doubled due to the financial crisis in 2009, now could be a good time to start climbing the housing ladder.