Rural housing loan guaranteeOpen
A rural housing loan guarantee allows you to buy and renovate a home in the countryside.
The housing loan guarantee makes it possible to buy an apartment, house, plot of land or summer cottage. In such a case, the purpose of buying a plot must be the construction of a private house and, in the case of a summer cottage, renovation of the summer cottage for year-round living.
The service is not available in the following areas:
HARJU COUNTY - Harju County cities, towns and boroughs and municipalities adjacent to Tallinn, except Ardu, Habaja, Loksa, Rummu and Ämari
TARTU COUNTY - Tartu County cities, towns and boroughs, except Alatskivi, Kallaste, Rannu and Rõngu
PÄRNU COUNTY - Pärnu City as a settlement unit, Sauga Borough, Paikuse Borough
LÄÄNE-VIRU COUNTY - Rakvere City
VILJANDI COUNTY - Viljandi Town
RAPLA COUNTY - Rapla Town as a settlement unit, Kohila Borough
SAARE COUNTY - Kuressaare Town as a settlement unit
LÄÄNE COUNTY - Haapsalu Town as a settlement unit
- The loan amount can be higher than the value of the property.
- The value of the property to be purchased and renovated must cover at least 25% of the loan amount.
- To apply for a KredEx housing loan guarantee, please contact the bank, as the loan and also the guarantee can be applied for through the bank. There is no need to contact KredEx separately.
- At least one loan applicant who wishes to use the KredEx housing loan guarantee must belong to one of the loan's target groups.
- Self-financing is at least 10% of the loan project value.
- The amount of the guarantee is up to 80% of the outstanding principal part of the credit, but not more than €80,000.
- The maximum limit of the loan amount is €100,000 and up to 90% of the purchase and/or reconstruction cost.
- The value of the property to be purchased or renovated must cover at least 25% of the loan amount.
- A mortgage is placed in favour of the foundation on the collateral for the credit granted for the purchase or reconstruction of housing in the rural area.
- The guarantee fee is 1% of the guarantee balance per year, which is paid monthly until the end of the guarantee contract.
- In the case of both the birth of a child and of an existing child, a loan grace period may be granted until the child becomes three years old.
- Only one KredEx housing loan guarantee can be used at a time.
- The owner and user of the housing to be purchased or renovated must be the borrower. It is allowed to acquire housing in joint ownership with a spouse or co-borrower.
Good to know
- Property purchased with a guarantee cannot be rented out.
- Applying for the guarantee takes place through the bank.
- The collateral must be insured.
- See the housing loan guarantee conditions of other target groups here.
As far as we know, rural housing loan guarantees are currently offered by Coop Pank (we update the webpage on an ongoing basis regarding the banks that offer the service).
To apply for the guarantee, contact the bank, which will then organise the guarantee and the subsequent reporting.
The property to be purchased is mortgaged in favour of KredEx. The market value of the collateral does not have the usual significance for the bank in assessing credit risk. When using the guarantee, the KredEx guarantee is the guarantee for the bank (unless additional guarantees are included in agreement with the client).
For example, if the client has sufficient solvency, it would be possible to conclude a loan contract for the implementation of the following plan:
a creditworthy client wants to buy a country home costing €25,000 and renovate it, with the planned cost being €75,000. The client has €10,000 available for self-financing the project.
The bank evaluates the application and offers a loan of €90,000. KredEx would guarantee 80% of the loan amount, or €72,000.