The next year does not promise anything good for the national economy – budget funding will be minimal, as it is primarily focused on defense. Nevertheless, in 2026 we have elections – and therefore the state does not forget about motivating the potential electorate, including through housing!
For all categories
The geography of the housing program "Increased Guarantees for Regions" covers the entire country, from Ventspils to Rezekne and from Valmiera to Jelgava, with plans to build also in the metropolitan area: Adazi, Marupe, Kekava, Olaine, Salaspils, and Ropazi.
Households with the lowest incomes are targeted by a program for the restoration and construction of social houses amounting to 82.65 million euros. The middle class is addressed through a line for the construction of low-rent houses – 84.4 million, as well as energy efficiency projects (insulation) for apartment buildings.
As for those at the top of the pyramid, such as promising specialists and military personnel, they will be offered preferential purchase of apartments "on market terms."
The maximum transaction amount indicated by the Ministry of Economics for which support is provided is 300,000 euros, which is substantial. Currently, assistance in financing has been provided to 33,424 families in Latvia, with the total amount of state guarantees reaching 280 million euros, which is just a little over one-tenth of the total mortgage loan in the country – 2.7 billion.
The state guarantee for the purchase of real estate is issued for 10 years, with future owners required to make a one-time payment of 2.5% of the assigned amount. In turn, the authorities provide a reduced state duty for securing ownership in the Land Register, amounting to 0.05% of the value.
The biggest bonus today can be received by a family with 3-4 children, and even those "in the project" (if pregnancy has occurred): the state covers up to 50% of the loan amount, in absolute figures up to 50,000.
Red Flags for Borrowers
However, there are burdens for obtaining state guarantees. For instance, the family subsidy type BALSTS cannot be obtained if the applicant for subsidized housing:
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already owns any residential property (house, apartment, summer house);
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total income for the past year per family member exceeded 23,000 euros gross (approximately 2,000 euros per month);
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has not been a Latvian taxpayer for the past year;
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the subsidy exceeds 50% of the value of the property;
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the subsidy has already been received previously.
According to statistics from the State Land Service and the financial institution ALTUM, the most active participants in support programs currently live in the vicinity of Riga (20% of all transactions are subsidized) and in Riga itself (16%). Conversely, the maximum number of operations without loans and collateral occurs in Latgale (90%) and Kurzeme (82%) – where "own funds or loans of another kind" are used.
Meanwhile, even if a mortgage loan is issued by a commercial bank, in more than 40% of cases the property itself does not serve as collateral, according to data from the Bank of Latvia.
947 Apartments Up for Grabs
The demand to become a tenant who pays no more than 6.47 euros per square meter, including all utilities, is quite high. Or the supply is low: consider this – only 18 subsidized apartments are being built in Tukums and Aluksne regions; 30 in Smiltene. However, in Valmiera, there are a total of 120, which is a growth point for us.
To qualify for such an apartment, a household must not have a monthly income exceeding: 1,681 euros for a one-room apartment, 2,896 for a two-room, 4,433 for a three-room, and more. In all regions, qualified specialists have the first priority, and only in Ventspils do the disabled have priority.
According to the Ministry of Economics, at least 1,952 municipal apartments – social or rental – will be restored or built in Latvia by 2029.
Insulation for 230 million
A separate industry niche is the increase in energy efficiency of buildings. There are two lines of funding available: the European Recovery Mechanism provides 57.2 million euros and the European Regional Development Fund provides 173 million euros.
The control indicator is a reduction in the primary energy consumption of buildings by 30%. However, for the Latgale region, even those projects that reduce consumption by at least 10% are subject to payment.
Works funded by subsidies include:
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replacement of heating systems, radiators, windows, doors;
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insulation of roofs, attics, basements, and exterior walls.
Grant recipients can be both apartment owners' societies and individual owners, as well as business entities managing real estate. Among those applying for support are 430 buildings, but only 31 have received it so far...
Jurgis Miezainis, parliamentary secretary of the Ministry of Economics, acknowledged at a meeting of the Saeima subcommittee on reducing inequality that non-bank lending is used in the housing sector. Therefore, a new procedure has now been agreed with the European Commission, under which "ALTUM goes instead of banks."
– Financial institutions often refuse loans, – the official stated. "In fact, the market is stagnating." Thus, the function of mortgage lenders, primarily in the regions, will be taken over by the state structure.
"It will not be necessary to go through all the banks and receive refusals everywhere; it will be enough to apply for this loan," Mr. Miezainis promised, pointing towards ALTUM. However, this tool will also be oriented towards the average interest rate in the market. And not without reason, as "in its youth" this institution was the Latvian Mortgage and Land Bank, which did not survive the banking crisis of 2008-2010 and sank along with Parex Bank.
– We are the first EU country to have agreed to this, – the parliamentary secretary proudly announced. – I urge residents of the regions to take an interest.
CREDIT IS A YOUNG PERSON'S BUSINESS
At the end of October, ALTUM launched a lending program for regions located outside Riga and the capital's surroundings. They promise to distribute 106.1 million euros. Loans can be utilized by citizens and non-citizens of Latvia, individuals with stateless status, and citizens of Switzerland. The maximum loan term is 30 years, and the borrower must be under 65 years old at the time of repayment. Thus, a 36-year-old resident of Latvia may not even need to apply for a 30-year loan.
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