Apartment building renovation loan

Open

Purpose

The loan is directed towards those apartment associations that have received a negative response to their renovation loan application from a bank or an offer with unreasonable terms (e.g. very short term, an interest rate that is significantly higher than usual).  With the help of the loan it is possible to finance renovation works and to combine the loan with reconstruction support offered by EIS, in order to provide the apartment building with a completely new lease of life.

Benefits

  • Energy savings
  • Healthy indoor climate
  • Like a new residential building

For who?

Korteriühistu

apartment association

Service is suitable if

  • the loan recipient is an apartment association
  • the apartment association is creditworthy
  • the loan recipient has the competent decision of the general meeting regarding the performance of renovation works, borrowing and concluding a pledge agreement
  • the renovation works are scheduled in the apartment building’s management plan
  • an apartment building is considered to be a residential building with three or more apartments
  • at least 80% of apartment ownerships belong to individuals
  • in a residential building with up to 5 apartments, all apartment ownerships must belong to different and unrelated individuals
  • the apartment building is used as a residence

Important conditions

How to apply

In order to receive a loan from EIS, there must be a decision or response from the banks not to grant a loan to your apartment association or the offer must contain unreasonable conditions. For example, it is considered unreasonable to charge an interest rate that is double the interest rate offered by banks on the market for an equivalent project, or where the required amount of self-financing exceeds 20%. You can also apply for a renovation loan from EIS if you would like to reconstruct the entire residential building, but are not receiving a big enough loan from the bank. Once you have received the bank’s loan decision or negative decision, a loan application, along with additional documentation, should be submitted to EIS. If you want to use the apartment building reconstruction support offered by EIS in conjunction with a loan, you must first submit an application to EIS for support, after which you must contact the bank for a loan. In the event that you receive a negative decision from the bank or an unreasonable offer, you may then submit a loan application to EIS.

Please send any questions and the documents required in order to submit an application to the address [email protected].

Please Note! The maximum size of one letter is 10MB. Larger messages may not arrive. Larger attachments can be sent via a link or e-KredEx.

Renovation works financed by a loan

All co-ownership-related renovation works that ensure the structural stability of the apartment building, increase the energy efficiency of the residential building or improve the living conditions of the apartment building’s residents, including construction, maintenance and landscaping work performed for the preservation of a residential building, the land serving the residential building and the buildings serving the residential building located on that land, or for the improvement of their efficiency, safety and well-being, if they are performed together with the renovation of the residential building.

Apartment building renovation loan conditions
  • Interest starting at 2% + 6 month Euribor (if the Euribor is negative it is equated to 0).
  • Loan amount: the minimum amount is EUR 15,000, and the maximum is EUR 3 million per apartment association, including if it manages several apartment buildings.
  • Self-financing starting from 5%.
  • Term of up to 30 years.
  • Grace period as needed.
  • Service fees:
    • The contract fee is 1% of the loan amount; a minimum of EUR 150
    • in the event of increasing the loan amount, the fee for amending the contract shall be 1% of the amount to be increased; a minimum of EUR 30
    • in the event of the premature repayment of the loan the fee shall be 1% of the repaid amount; a minimum of EUR 30.
  • The loan recipient undertakes to coordinate with EIS, any assumption of additional liabilities exceeding the limit fixed in the agreement, the making of investments, and the disposal of assets.
  • Upon concluding the contract, there is an obligation to take out insurance (beneficiary: Estonian Business and Innovation Agency) for the entire duration of the loan contact.
  • Security: the security is the apartment association's claims against its members for the payment of management costs.
Required documents in the case of an apartment building renovation loan
  • A loan decision from at least two banks
  • Loan application (application.docx)
  • The original minutes of the resolution of the general meeting on the borrowing and conclusion of a pledge contract and the registration form for the participating apartment association’s members
  • Financial statement for the previous financial year and a valid management plan
  • invoices for the past three months from larger utility service providers
  • Bank statement for the last 6 months (from all banks where the apartment association settles)
  • Extract from the land register regarding apartment owners (not older than 1 month before the general meeting was held)
  • Apartment building renovation project or building expertise analysis report, or renovation plan, or energy audit
  • Two price offers for the works to be performed
  • If necessary, EIS may request additional documents and information
Disclosure requirements

The use of European Union funds comes with a public notification obligation, meaning that the public must be informed about the source of the funding.

If the total cost of the financed project exceeds 500,000 euros, an information plaque (fillable template available) must be placed on the apartment building. The plaque must be installed after the loan agreement takes effect and must remain in place until December 31, 2029.

Requirements for Using the Plaque:

  • the plaque must be installed on the project site or in its immediate vicinity in a publicly visible location.
  • the plaque must display a dual logo consisting of the European Union emblem and the Estonian flag with the text "Funded by the European Union", covering at least 25% of the plaque’s surface, along with the Enterprise and Innovation Foundation (EIS) logo
  • the plaque must include the project name (e.g., "Reconstruction of an apartment building at Sepise St. 7, Tallinn") and its primary objective, which must cover at least 30% of the plaque’s height
  • the minimum size of the plaque is 500×300 mm.

Important Notice: If the same apartment association has received both an EU-funded renovation loan and an EIS reconstruction grant, a single notification plaque for the grant is sufficient, and a separate plaque for the loan is not required (according to § 6(5) of the Public Notification Regulation). However, in this case, the notification plaque must still remain in place until December 31, 2029.

More detailed instructions on public notification can be found in the Government Regulation on "Public Notification of the Use of Cohesion and Internal Security Policy Funds for the 2021–2027 Period."

The costs of producing the plaque are covered by the apartment associations, and the design must follow the templates provided on the EIS website.

To design the plaque, you can use the State Shared Service Center’s plaque generator: https://www.rtk.ee/ukp.

For additional information about logos and symbols, see here.

 

Good to know

Contact us

Kristo Hütt

Kristo Hütt

Client Manager

kristo.hutt [at] eis.ee