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France trying to make it easier to qualify for real estate loans
The French Ministry of Economy and Finance, also known as Bercy, is concerned about the declining rate of real estate loans being granted to French citizens. To address this issue, they are evaluating ways to ease the rules governing access to credit, specifically the standards aimed at protecting against over-indebtedness.
Since January 1, 2022, French banks must comply with certain criteria defined by the High Council for Financial Stability (HCSF) to grant a real estate loan. However, institutions have the possibility of deviating from these criteria for 20% of loans, provided that these deviations essentially concern the acquisition of a principal residence and support first-time buyers. Bercy wants to ensure that these standards do not become an obstacle to accessing credit, and they are working with the Banque de France, the HCSF, and all stakeholders concerned to find solutions. They plan to make any changes announced at the next HCSF meeting in June.
The French Banking Federation is also in favor of opening a dialogue on the subject and has suggested granting criteria specific to banks that would allow them to take on more customers. The ministry’s declaration marks a new inflection point, after the “technical adjustment” of the calculation of the rate of usury in January, which exceeded 4%. This rate caps all the costs of a real estate loan and was accused of restricting access to credit by preventing banks from lending in a period of strongly rising rates.