Even with a limited income, it is possible to buy a house, renovate a house or build a house and this through a social loan. The Flemish government supports various forms of social loan or home loans. If, after negotiating with the bank, it appears that you have not reached the lowest interest rate, you can still qualify for an advantageous home loan if you have a social loan.
The Flemish government recognizes several credit institutions that offer this type of borrowing.
Different options for a social loan
The Flemish government supports certain home loans through the granting of subsidies, the interest rate of which is considerably lower than the interest rates applied by banks. These social loans are offered by the ABC Bank.
You must meet certain conditions for this, but these are the same at these recognized institutions. With other social borrowers, you can use a guarantee from the Flemish government, called a loan with a regional guarantee. You can obtain an advantageous home loan in this way, even if you do not reach the lowest interest rate after negotiations with your lender.
Conditions for receiving social benefits
With a social loan, the taxable income may not be less than 10,000 euros and may also not exceed the maximum limits set. The limit for the maximum allowable income is determined on the basis of your family composition, the location of the home or building land.
If the property or building land is not located in a core city or in the Vlaamse Rand around Brussels, the following applies:
- For a single person, this amounts to a maximum of 35,717 euros.
- The maximum allowable income is slightly higher for a disabled person.
- For people who do not fall under these two categories, the maximum limit of 53,569 euros applies.
If the house or building land is located in a core city or in the Vlaamse Rand around Brussels, the maximum income differs:
- For a single person, this is 37,417 euros.
- For a disabled person, this amounts to an income of 41,153 euros.
- For other people, the limit of 56,120 euros applies.
Your taxable income is stated on your last known assessment notice. You can calculate your interest rate free of obligation with simulation, for which you need the following data: taxable income, the family composition and the location of the home.
Conditions concerning the property
In addition to the income conditions, certain requirements are also set for the property that you want to buy. The property must meet a number of conditions:
- Located in the Flemish Region
- Intended for habitation or in any case the part intended for habitation must be larger and more valuable than the part intended for commercial purposes
- Meet the standards for safety, health and living quality
Important to know, during the term of the loan, the home must be occupied by the borrower (s) and may not be rented out
Sales value and volume of the house or building land
The estimated sales value must remain below the set limits. The maximum sales values differ depending on the family composition and the location of the home. You must use the data to find the limit for the maximum sales value.
The sales value of the property is estimated by an independent expert in this area. Different conditions apply to new-build homes. This is because it is classified on the basis of volume standards. If you want to buy building land or a plot, take the following requirements into account:
- Building land or plot must be located in the Flemish Region
- After 5 years at the latest, the lot or building land must have been built on.
Ownership value and payment capacity
When signing the loan agreement, you may not own full ownership or usufruct of another building plot, plot or dwelling. You must also be able to repay the social loan.
This means that you must have a monthly income that is high enough to meet the normal family needs in addition to paying the loan. In addition, it is also necessary to have own resources available because the costs for the notary cannot be borrowed within the social loan.
- Amount loan amount
- When obtaining a social loan you will be confronted with a maximum amount of home loan. This maximum amount is:
- When purchasing a home, building land or plot: The purchase price or estimated sales value
- For new construction: The cost price of the works or the estimated values thereof
- When taking over a previous loan: The sum of the debts and amounts.
The loan amount of the social housing loan may never be higher than the estimated selling value of the home. In determining the maximum loan amount, the account is taken of the work that may have to be carried out in order to meet the standards in the field of health, safety and living quality. These are necessary activities and therefore it is compulsory to borrow.
The interest rate is calculated based on your taxable income, family composition, the location of the home, plot or building land. The current interest rate varies between a minimum of 2% and a maximum of 3.59%.
It is true that you can get a discount on the interest if you meet a certain condition. You are eligible for this discount if you have a seriously disabled child and if your home is located in a core city or in the Vlaamse Rand around Brussels.
The family situation plays a role during the term of social loan. If this situation changes, the interest on the loan may also change. When changes occur in your family situation and/or your income, the interest rate may therefore change. But the interest rate never rises above the regular fixed interest rate in the contract and cannot fall below the minimum interest rate.