Wekerle Plusz: the key rules in brief

Who is eligible?

• The application can be submitted from the age of 18 until the applicant's 45th birthday at the latest. The applicant must have full legal capacity, and conditions also apply to citizenship or the legal basis of residence in Hungary. Marriage or children are not required.
• The applicant (and, for joint applications, both parties) must have a clean criminal record, no public debt registered with the tax authority (NAV) above the statutory threshold, and no disqualifying debt under the Central Credit Information System (KHR) Act, unless it was settled at least a year ago.
• At the time of application, the applicant may not have another interest-subsidised loan arising from state housing support, and may not apply for one at the same time or while the subsidy is in place. Having been ordered to repay an earlier subsidy may also be a ground for exclusion.
• The applicant may not own, and may not have owned, a share of at least 50% in a residential property. Exceptions apply, for example, to a home worth no more than HUF 30 million and to a home that has been demolished or ordered to be demolished. Usufruct only qualifies as an exception if it is based on law and the same usufructuary lives in the home at the time specified in the decree. For the HUF 30 million exception, it is not enough to look only at the value of the ownership share: the calculation rules for the value of the whole home and, for joint applications, the combined value of the ownership shares must also be examined.
• Spouses and cohabiting partners may only apply jointly, in which case their existing or former ownership shares in the same home must be added together. The subsidy can be used once per person.
• Conflict-of-interest rules also apply to the seller or the contractor: for example, a transaction with a close relative, a cohabiting partner or a company in which the applicant has an interest is generally not eligible; there is a separate exception for buying out an inherited co-ownership share.

What for and how much?

• Purpose: buying or building a new or used flat, family house, farm or estate centre in Hungary.
• Loan amount: up to HUF 50 million, for a term of up to 25 years.
• Interest payable: while the subsidy is in place, no more than 3% a year for new homes and construction, and no more than 5% a year for used homes. If the subsidy ends, the interest burden may increase.
• Own contribution: at least 10%, unless the applicant provides adequate additional collateral (for example, another property) under the central bank's (MNB) loan-to-value rules.

Price caps

For construction, the caps apply to the construction cost as defined in the decree, and the price per m² refers to the usable floor area. The price-per-m² cap will first rise on 1 January 2028 and annually thereafter, in line with the new-home price index of the Hungarian Central Statistical Office (KSH) specified in the decree.

The bank also assesses the value of the property and the applicant's creditworthiness, so a 10% own contribution does not automatically mean eligibility for the loan. As a rule, acquiring a home encumbered by usufruct or a mere co-ownership share cannot be financed; for the latter there are statutory exceptions, for example where exclusive use is properly arranged.

Co-borrower

Depending on the bank's credit assessment, the applicant's parent or sibling may join as co-borrower, but may not acquire ownership of the property.

Deadlines

• Purchase: the loan application must be submitted within 180 days of concluding the sale and purchase agreement.
• Construction: the application must be submitted before the occupancy permit is issued.
• The bank decides within 30 days for purchases and 60 days for construction, not counting time spent supplying missing documents.

Obligations after disbursement

Borrowers must register the property as their place of residence within 180 days of disbursement (for construction, as a rule, of the final instalment; for certain new homes, of the issue of the occupancy permit). Actual residence is required for the five-year period set out in the decree. As a rule, the home may not be rented out or used for purposes other than housing. There are exceptions to the residence requirement in specified cases: these may include justified employment in another town for up to two years, temporary absence for studies, institutional care as defined in the decree, or temporarily caring for a close relative. These do not provide a general exemption from the ban on renting out.

The state's claims are also secured by a mortgage and a prohibition on alienation and encumbrance. For purchases, these last for five years from the loan agreement; for construction, for the period of construction and five years after the occupancy permit is issued. Home insurance must also be maintained for the period set out in the decree.

Breaching these obligations may result in the subsidy ending and having to be repaid. The amount to be repaid, the interest and any opportunity to remedy the breach depend on the type of breach; the consequences are not the same in every case.

Costs

The bank's application and disbursement fees together may not exceed HUF 30,000 (valuation and site inspection fees are payable in addition), and the early repayment fee may not exceed 1% of the amount prepaid.

What to watch for in the sale and purchase agreement

• The 180-day application deadline runs from the conclusion of the agreement, so it is worth starting the loan process early.
• State in the agreement what happens to the earnest money if the bank rejects the loan application.
• Check that the purchase price and price per m² fall within the caps, as the bank will verify this.
• If the property is subject to usufruct or another encumbrance, clarify this with the bank before signing.

This article is for general information only and does not constitute legal advice. For advice on your specific situation, please get in touch.