For purchasing a newly built apartment through the POS+ Programme, you can obtain a public loan and more favourable bank loansThe POS+ Programme stimulates the sale of newly built apartments on the real estate market by approving loans for purchasing the apartment by means of public funds.
Requirements for loan approvalA public loan may be obtained by any natural person who is a citizen of the Republic of Croatia. The loan is granted only for purchasing a newly built apartment which:
- is purchased directly from the investor, the contractor or the legal entity included in the system of value added tax (VAT)
- has proper ownership documents and the official act for use
- is registered in the land registry as a separate part of the property
- sale price (including VAT) does not exceed EUR 1,400 per square metre of the useful floor area in HRK equivalent.
The average interest is around 3.65 percent, and the repayment period of up to 31 years. The loan is repaid in two parts: first, the bank loan is repaid within no more than 28 years, and then the public loan is repaid.
The granting of public loans is performed by the Agency for Transactions and Mediation in Immovable Properties (APN), Savska cesta 41/6, Zagreb, phone: 01/6331-600
Loan amountIrrespective of the price per square metre of the useful floor area of the apartment that is purchased, the loan amounts to EUR 200 per square metre of the apartment’s useful floor area in HRK equivalent (payable at the midpoint exchange rate of the Croatian National Bank) regardless of the apartment price, provided that the maximum apartment price may not exceed EUR 1,400 per square metre.
Securing the remaining fundsThe remaining funds for purchasing the apartment, up to the total apartment sale price, shall be secured by the buyer:
- using his/her own funds, in the amount of at least 15 percent of the apartment sale price
- using funds from a special purpose loan, or a housing loan approved by a bank or a housing savings bank with which APN has an agreement on business cooperation.
Loan repayment period and the amount of monthly instalmentsThe total loan repayment period may not be longer than 31 years from the date of concluding the loan contract. A buyer of an apartment under the POS+ Programme first repays the funds loaned by the bank, within a period not exceeding 28 years, and only after the commercial bank loan closure, he/she starts to repay the public loan.
If you are using only public funds to purchase an apartment, without a bank loan, the public loan repayment period may be up to eight years from the date of concluding the loan contract and, depending on your capabilities, may be shorter.
In the case of instalment payments, monthly instalments are determined in monthly annuities, so that their amount is equalised during the entire repayment period, i.e. the amount of a monthly annuity for the bank loan and the amount of a monthly annuity for the public loan are approximately equal.
Interest rate on approved loan fundsThe interest rate on loans issued by banks with which APN has concluded a business cooperation agreement is more favourable compared to commercial terms and conditions.
The interest on approved public loan funds during the bank loan repayment period (public loan grace period) shall be calculated at a rate of one percent per annum and added to the principal, while the interest during the public loan repayment period shall be calculated at a rate of three percent per annum.
The average interest rate is about 3.65 percent.
Steps to purchase an apartmentIf you wish to purchase an apartment under the POS+ Programme, you should choose the apartment on the market by yourself and then submit the apartment purchase pre-contract (or contract) to one of the banks with which APN has established business cooperation.
The bank will then check the completeness of the documentation related to the apartment, as well as your creditworthiness. You will complete the application for a public loan at the bank, and all the documentation will be submitted to APN by the bank.
Following this, APN will review the submitted documentation and reach a decision on approving the public loan, which is delivered to the commercial bank.
After that, you will sign a loan contract with the bank. The bank will deliver all documentation, including the property purchase contract.
Then, APN will prepare a subsidised public loan contract and invite you to sign it. After signing, APN will register a (second rank) mortgage on the apartment in the amount of the public loan, and will pay the amount of public funds to the seller’s giro account, namely within 30 days from the day when the borrower delivers proof that he/she paid the remaining portion of the purchase price.
Loan application documentsThe loan approval application must include the applicant’s name and surname, permanent residence address and Croatian Personal ID Number (OIB).
With your application, you must enclose the following:
- copy of the ID card
- apartment purchase pre-contract or contract for the apartment for the purchase of which you are applying for a loan
- proof of securing the remaining funds (certificate of creditworthiness by the bank, extract of your own account balance, etc.)
- copy of the official act permitting construction and copy of the official act permitting the use of the building in which the apartment you intend to purchase is located.