10 Percent Down Home Purchase Bill to Be Postponed

YERUSHALAYIM -
Arab construction workers in Beitar Illit. Photo by Nati Shohat/Flash90
Construction workers in Beitar Illit. (Nati Shohat/Flash90)

A proposal to provide government guarantees for home buyers who would only have to put 10 percent of the cost of an apartment down in order to get a mortgage will be discussed only in six weeks, the bill’s sponsor, MK Orly Levi-Abukasis (Yisrael Beytenu), said Wednesday. Levi-Abukasis made the decision after consulting with Deputy Finance Minister Yitzchak Cohen, along with advisors from the Treasury. The purpose of the delay is to enable Levi-Abukasis to come to an agreement with finance officials on the conditions for providing the assistance and securing the mortgages.

A discussion on the bill, set for Sunday by the Ministerial Law Committee, was postponed to an as yet undetermined date. According to Levi-Abukasis, “the government intervenes in the Israeli housing market in numerous ways, such as in allocating property for the construction of projects in different parts of the country, or in providing assistance to those in need to buy a home. In this law we have an additional tool to help young couples buy a home, by providing government guarantees for mortgages that allow couples to finance 90 percent of the cost of a home. Thus even couples who don’t have enough money for a down payment will be able to purchase a home.”

With housing prices high and the general requirement by banks for a minimum of 25 percent – and usually 30 percent – of the price of a home to be supplied by mortgage applicants, even homes with 30-year mortgages are often out of reach for young couples. The new law will, according to the MK, allow more young couples to buy homes, assuming they have the income to pay the mortgage (most banks are willing to give a mortgage that would entail payment of up to 40 percent of a household’s income for repayment).

On Wednesday, Levi-Abukasis said that she had been trying “to advance this bill for two years to help people buy a home – perhaps the only home they will ever be able to buy, because the assistance will be given one time only. As things stand today, people are forced to borrow money from all sorts of sources, in essence presenting to banks a fictional picture of their net worth – and potentially getting themselves into trouble because of high debt. Everyone knows what is going on, but they look the other way. For those who can’t get those loans, the dream of a home of their own evaporates. I am very happy that, finally, the Treasury is paying attention to my proposal.”