The state will guarantee its low-cost Price Resident program to the tune of over half a billion shekels, the Knesset Finance Committee said Monday. The money will provide guarantees to home buyers who have already, and will in the future, purchase homes without bank guarantees.
After several scandals and bankruptcies, the law in Israel requires that home purchases be bonded by banks, to ensure that home buyers do not lose their money in case of bankruptcy. That is not the case with the Price Resident program, in which the government steps in to guarantee the purchase of homes that are being sold below market price and that banks have chosen not to guarantee.
The guarantee money will ensure that several projects, in Lod and Afula especially, are able to proceed without interruption after the contractors warned that they needed assistance. According to Commitee chairman MK Rabbi Moshe Gafni (UTJ), the funds are needed in order to ensure that the projects are completed in as quickly a manner as possible. “Therefore I support providing government guarantees to ensure that projects are completed.”