The Instituto de Crédito Oficial (ICO) has opened the application period for three types of aid to finance affordable rental housing, including promoter loans, investor loans, and mixed promotion and tenure loans.
Financing Affordable Housing
The launch comes after the approval of this new instrument in early August, which is part of the España Crece project and will mobilize 12.150 million euros to financially support future projects throughout their life cycle.
The first modality provides financing for new construction or rehabilitation of buildings for affordable rental housing, from the start of the promotion to the commercialization and stabilized occupation of the asset.
This modality can include a non-repayable tranche to cover the economic viability gap of each project, subject to meeting the established requirements.
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Types of Loans
The promoter loan finances projects from the beginning of the promotion to the commercialization and stabilized occupation of the asset, while the investor loan provides long-term financing for the ownership of protected housing assets already completed and in stabilized operation.
The mixed loan modality is aimed at operators who promote the asset with the purpose of maintaining and managing it in the long term, integrating construction, rehabilitation, commissioning, stabilization, and subsequent tenure phases into a single financing.
According to the ICO, the three modalities allow for the financing of projects from promotion to long-term operation, as well as the financing of assets that are already stabilized.
The ICO has made public the documents detailing the general conditions, including eligibility, admission, financing, formalization, and monitoring requirements for each modality.
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Investment Strategy
The España Crece investment strategy has received an injection of 10.891 million euros in capital and a subsidy component of 2.800 million euros from Next Generation European funds, which will allow for the continuation of the Recovery, Transformation, and Resilience Plan.
Housing will be the first area where the deployment of these funds will materialize, and the ICO will also activate an investment vehicle to reinforce the capital of affordable rental projects.
Together, both instruments can reach up to 13.787 million euros and mobilize around 23,000 million euros with the collaboration of the private sector.
It is a new development.