Sigurður Ingi announces imminent resolution on shared ownership loans in Iceland

Sigurður Ingi Jóhannsson, Iceland’s Minister of Finance, announced that a resolution regarding shared ownership loans is imminent, expected within a few days. Over thirty individuals and families are currently awaiting loan approval through Mikluborg Real Estate, having had their purchase offers accepted.

Shared ownership loans are designed for first-time homebuyers or those who haven’t owned property in the last five years, with specific income limits. The loan is interest-free for ten years, with the possibility of three five-year extensions. Repayment comes either upon the sale of the property or at the end of the loan term. Since April, there has been no distribution from the fund, prompting frustrations among those waiting for approval.

The demand for these loans soared earlier this year when three billion ISK was allocated, which quickly ran out. Real estate agent Ólafur Finnbogason highlighted the challenges this situation presents for many waiting on loans as they remain tied to their current living situations.

This spring, the parliament approved an additional one billion ISK for the initiative to address the increased demand. Sigurður Ingi stated that significant progress had been made in collaboration with the Housing and Construction Authority this summer. Plans are underway to distribute the new funds for ongoing projects, ensuring that potential buyers can expect answers very soon.

Looking ahead, the government aims to manage the allocation of funds more evenly throughout the year to prevent early depletion and ensure that all applicants have equal access to the program, particularly for the latter part of the year.