What does the „Otthon Start Program” offer to foreigners living in Hungary?

In recent months, almost everyone has been talking about the Hungarian government's first home purchase support measure, the „Otthon Start Program”, which offers a preferential loan at an interest rate of 3% pa, based on government subsidies.

This program may also be an opportunity for foreign citizens who plan to live in Hungary in the long term and want to buy their own property.

To get a complete picture for all foreign citizens living in Hungary, we called on the expert at ’egyrolakettore.hu’, Judit Hürkecz, to help us clearly understand the opportunities and requirements of the new loan program and the loan options available to foreign citizens.

As an independent financial intermediary with more than 10 years of experience, Judit also helps foreign citizens find the most favorable loan structures.

We would like to present the most important questions and answers about loan opportunities in Hungary and the „Otthon Start Program” from the perspective of foreigners living in Hungary and primarily for them:

Who might be eligible for a loan in Hungary as a foreign citizen?

-    Those with the immigration status granting the right of permanent residence (e.g. holders of EU Residence Card, or National Residence Card, etc.)

-    People exercising their Right of Free Movement and Residence in Hungary for more than three months (EEA citizens or family members with third country nationality of EEA citizens)

As a non-Hungarian citizen, what do you need to successfully apply for a loan?

-    You definitely need a Hungarian plastic residence card

-    An existing Hungarian bank account number at certain banks

-    As a non-Hungarian citizen, only the income from Hungary is considered when applying for a loan, while a suitable co-signer may help with this

-    In addition, you must also meet the credit assessment criteria of the specific bank, including their requirements regarding age, income, and equity

What are the basic conditions for participating in the „Otthon Start Program”?

-    In case of family/multiple-person application the allowable ownership status of any of the applicants is a maximum of 50% of an inner-city apartment or residential building at a time in any period in the past 10 years, or an unlimited number of non-inner-city, non-residential properties, or properties valued at less than HUF 15 million, demolished properties, and properties that came into the applicant's possession through usufruct and where the usufructuary currently resides in that property

-    A social security coverage of at least 2 years, with no interruption longer than 30 days (in certain cases, a foreign legal relationship is acceptable too)

-    Permanent address in Hungary at the time of application

-    No criminal record, no public debt, and the applicant has not been obliged to repay housing subsidies in the past 3 years

-    In addition to normal housing conditions, the property to be purchased must also meet other requirements in order to be eligible for the preferential loan (maximum purchase price of HUF 100 million for apartments, maximum purchase price of HUF 150 million for residential buildings, maximum gross price per square meter of HUF 1.5 million)

If someone owns real estate abroad, does that count towards the criteria?

It does not. This could be a great opportunity for foreign citizens, as expats living in Hungary meeting the eligibility criteria can purchase a property on very favorable loan terms, even if they already own real estate abroad.

As a foreign citizen, may I apply for a loan jointly with others?

- Yes, but all applicants must have the appropriate residential status, a Hungarian address, and must meet the specific bank's conditions

-    The „Otthon Start Program” has strict conditions for joint applications. Only spouses or parents can participate in the preferential loan program. For other market loans the banks’  practice is more lenient though, i.e. others can also be involved (like siblings, partners, etc.).

Do banks accept foreign legal status and foreign income when applying for a loan in regards of proving the 2-year legal status specified in the „Otthon Start Program”?

-    As to permissible foreign legal relationships specified in the „Otthon Start Program” only foreign student status, or employment in a neighboring country with a Hungarian address card, or official employment with a EU institution is acceptable for the two-year period

- Other foreign legal relationships may also be partially acceptable towards the two years rule, but the last 180 days must be covered by an appropriate legal relationship in Hungary

How do banks require proof of income?

-    In the case of an indefinite employment contract in Hungary, proof of income for at least 3 months is required; in some cases, the requirement  may be 6 or even 9 months. The applicant cannot be on probation or under notice of termination

-    In some cases, a bank account statement is sufficient; in other cases, an employer's certificate is acceptable, in the case of some other income, a tax authority certificate, a payer's certificate, etc. might be accepted.

-              In the case of self-employment credit institutions typically require documentation of one full closed business year (Jan. 1 to Dec. 31), but there are some lenient banks that will consider income after just twelve months of operation

-    In the case of fixed-term employment contracts, banking practices vary, but it is essential that the legal relationship has been in place for at least three months at the time of application, and the contract will remain in force for at least another three months, although some banks may require up to one year.

Is an EU citizen who has an EU Registration Card and a Hungarian address card and meets the other criteria, eligible for a loan?

-    Yes

Is a third-country national who has permanent residence status, has a Hungarian address card, and meets the other criteria eligible for a loan?

-    Yes

Is a third-country worker in possession of a residence permit for employment purposes (EU Blue Card, National Card, etc.) eligible for a loan?

-    No, he/she is not. A permanent address in Hungary is required for any loan. If you have one of those types of permits and you are planning to take out a loan, it is worth checking your eligibility and starting the settlement process

Are there certain nationalities not eligible for loans in Hungary?

-    Banks have different practices and assess applications from citizens of different countries on a case-by-case basis, taking into account many factors. For example, Russian, Ukrainian, and Israeli citizens should be prepared to certain institutions not offering loans at all. It is advisable consulting an independent financial advisor, as they can help you find the right institution and loan structure

What are the general documents that every bank asks foreign citizens to provide?

-    Personal documents, address card

-    Proof of income (employer's certificate, tax authority certificate, payer's certificate)

-    Document certifying the right of permanent residence or the Right of Free Movement and Residence

-    Bank account statement

-    Documents related to the property to be purchased (floor plan, purchase agreement, energy certificate)

-    Real Estate Purchase Permit

There are cases where, due to reasons related to either the property to be purchased or to the applicants, the new preferential loan scheme is not available. In such cases what interest rate will be available for market mortgage loans at the end of 2025 compared to the preferential 3% option?

Depending on the amount or the purpose of the loan, and on the income of the applicant, mortgage loans range from 5.8% to 7% pa interest rates. For loans of HUF 15 to 20 million, with a promised monthly amount of HUF 500 000 credited to the bank account individual interest rates between 6.09% and 6.39% may be available at several banks. Without the involvement of a free-of-charge financial advisor, the interest rate offered is often higher than this

Are there any other details or circumstances that are particularly important for foreign citizens when taking out a loan in Hungary?

Banks may require a certain level of Hungarian language proficiency. Non-Hungarian citizens may need the assistance of an interpreter, and there are institutions that require all applicants to have active Hungarian language skills

It is worth requesting a preliminary bank commitment regarding creditworthiness. With the exception of one bank, there is no fee for this, and it is only binding on the bank. After that, if circumstances do not change, all that remains is to find a suitable property and obtain a Real Estate Purchase Permit to realize your plans.

In summary, as a foreign citizen, the following are required to take out a loan:

-    Permanent residence status or Right of Free Movement and Residence

-    Hungarian address card

-    Proven Hungarian income

-    Hungarian bank account number for some institutions

-    Compliance with the bank's specific requirements on age, income, and equity

-    Property Purchase Permit

Immigration status and loan application – how are those two related?

Residency status is one of the critical elements of borrowing from banks in Hungary, which is why we would like to offer support to those who are considering securing permanent residency in Hungary. Based on our more than 30 years of experience, proper preparation is one of the key preconditions to obtaining permanent residence.

What does the immigration office examine when preparing for permanent residence (settlement)?

-    A National Residence Card requires at least 3 years of legal and uninterrupted residence, while an EU Residence Card requires 5 years. It is very important to note that only certain types of residence permits allow for settlement. The options provided by your current residence permit must be checked at the very beginning of the process

-    Stable housing, livelihood, and valid health insurance

-    Sufficient savings must be available in the 12 months prior to the application, which must be a significant amount and continuously growing

-    Certificate of successful completion of a cultural exam

Every permanent residency case is unique and depends largely on the length of time spent in Hungary, the availability of appropriate collateral, and family ties established in the country. In all cases, having a relocation specialist support through the entire process will help ensure a successful application.

An important detail regarding home purchases and loans is that savings sufficient to cover the down payment are essential for obtaining residency status as well. Obtaining permanent residency status requires lengthy preparation, as the authorities also conduct a lengthy review. Successful preparation for the cultural exam, support throughout the entire settlement process, and ongoing professional advice can shorten the process and help you avoid rejection, so it is worth contacting ARC's experts 1-2 years before you plan to take out a loan.

How ARC Corporate Mobility and its independent financial advisor partner may support you in obtaining a loan:

-    By securing more favorable interest rates than those publicly available from banks

-    By expediting the loan approval process through the preparation of legal documents

-    By conducting a preliminary assessment of your compliance with the specific requirements of immigration authorities and banks

-    By identifying the necessary steps and providing a precise schedule for a successful loan application

ARC Corporate Mobility may assist in obtaining the necessary documents as follows:

-    Assistance in obtaining an address card

-    Updating permits, full support in obtaining the suitable permanent residence permit

-    Compiling income statements

-    Obtaining a property purchase permit

-    Translation of the purchase agreement

-    Preparation of a notarial deed

Whether it is a distant dream or a concrete plan, owning one’s home is also possible for foreign citizens in Hungary, and ARC Corporate Mobility provides expert support in achieving those goals.

Thanks to our financial intermediary partner, ’egyrolakettore.hu’, we can provide professional support to all interested parties throughout the entire loan application process. If you have any questions or are a foreign citizen considering taking out a loan, please contact us here.