Are you thinking about buying your first home in 2024? But with mortgage rates at an all-time high and housing prices still on the rise, are you hesitating and looking to take advantage of the available financial assistance? Recent revisions to assistance programs now allow more first-time homebuyers to benefit from them to reduce the costs associated with their home purchase, whether it’s a new or existing home.
L’Agencerie has put together a guide for you on all the assistance programs available to help you become a homeowner: from the revamped Zero-Interest Loan to little-known local assistance programs, including discounted home-purchase schemes—you have all the options at your fingertips. Follow the guide!
The Zero-Interest Loan in 2024: Major Changes
The flagship program for first-time homebuyers, the Zero-Interest Loan (PTZ), is gaining momentum. With no fees or interest, it supplements the main loan and significantly increase the down payment. Its revised 2024 version, featuring significant changes, makes it more accessible and better suited to the specific needs of first-time homebuyers. Here are the key changes.
Higher income limits
Income limits have been raised, with increases ranging from 14 to 38 percent depending on the bracket. The goal? To make a much wider range of households eligible for the PTZ, particularly middle-class households with net monthly incomes ranging from €2,500 to €4,000.
A real lifeline for those on the tightest budgets! With nearly 6 million potential new beneficiaries, the revamped PTZ is designed to be an effective stepping stone to homeownership.
Subsidized financing covering 50% of the real estate transaction amount
Another key measure is that the portion of a real estate project eligible for financing through the PTZ will increase from 40% to 50% starting in 2024. In practical terms, for a purchase of €200,000, you’ll be able to obtain up to €100,000 in PTZ financing, compared to €80,000 in the past. This is a significant boost for saving up your down payment, especially since mortgage rates are still hovering around 4%.
This would provide significant relief to the budgets of low-income households and allow them to borrow the remainder at the standard rate with greater peace of mind.
Refocusing the PTZ 2024 on new multi-unit housing located in high-demand areas
New for 2024: New single-family homes are no longer eligible for the PTZ program! The program now targets new multi-family housing units located in the so-called high-demand zones A bis, A, and B1, where housing demand is highest.
However, the PTZ remains available to finance older homes requiring renovations, though it is now limited to the less competitive B2 and C zones.
Purchasing public housing made easier with an interest-free loan (PTZ) increased to 20%
The latest major change: Social housing tenants looking to purchase their primary residence will be able to finance up to 20% of the purchase through the PTZ—compared to just 10% previously. A huge boost toward independence and the joys of homeownership!
Do you think you qualify as a first-time homebuyer? Check your eligibility for the new version of the PTZ right away! The simulation tool below will give you an initial idea:
PTZ Simulator 2024 (to be inserted as a popup/iframe)
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Plan for your purchase with the PEL at 2.25%
Another valuable tool for first-time homebuyers, the Home Savings Plan (PEL), will see its interest rate jump to 2.25% as of January 1, 2024, up from 1% since 2016. This should significantly boost your interest earnings to build a solid nest egg before taking the plunge into homeownership.
A quick reminder of how this regulated savings product works:
- A minimum of 4 years of mandatory contributions is required to qualify for a loan
- Limits of €61,200 in total savings and €92,000 in mortgage loans
- Tax rate reduced to 30% for taxes and social security contributions on interest, which are final and non-refundable
“In 2024, the PEL is once again proving to be an effective tool for pre-financing part of a real estate project.”
Homeownership at Affordable Prices
The result of a carefully crafted partnership between local governments and real estate developers, this program offers a significant discount on the purchase price, generally ranging from 10 to 20 percent of the market price. Under this program, municipalities choose to sell the land at a reduced price to a developer, who in turn commits to selling these properties at regulated prices.
Eligibility criteria for the affordable homeownership program are generally aligned with those of the Zero-Interest Loan (PTZ) and may vary depending on geographic areas and local projects. They may include conditions such as household income, the ratio of housing costs to income, or the requirement that the applicant has not owned their primary residence in the past two years.
The Solidarity-Based Real Estate Lease (BRS)
Another measure introduced by the government in 2015, the “bail réel solidaire” is based on the separation of ownership of the building from that of the land. In practice, you purchase only the building—the bare ownership—while a solidarity-based land organization retains the land, leasing it to you for a nominal rent over the long term. In short, only the building itself is fully owned.
The result: this program can reduce the cost of housing by up to 40%! It’s a real boon, especially as mortgage interest rates are skyrocketing. And the good news is that the income eligibility requirements for the BRS will be expanded in 2024. No fewer than 3.8 million additional households will be able to benefit from it.
The Social Rental-to-Own Loan (PLSA)
The Social Rental-to-Own Loan (PSLA) is a clever alternative for gradually becoming a homeownerin two stages. How does this little-known program work?
- You start by renting an affordable new apartment
- You then purchase it from the landlord, usually within five years of saving up your down payment
In addition to offering the security of saving in stages, this arrangement provides several significant tax benefits:
- Reduced VAT to 5.5% during construction and then at the time of purchase
- Temporary Property Tax Exemption
- Can be combined with other subsidized loans (PTZ, Action Logement, etc.)
In short, it’s a great opportunity for low-income households looking to get their real estate project off the ground with peace of mind.
“Given the current market volatility, the PSLA greatly stabilizes the home-buying process by breaking it down into successive steps and helps offset rising interest rates.”
The 1% Action Logement Loan
Another option is the Action Logement Loan, which offers private-sector employees financing at an ultra-low interest rate: 1% excluding insurance. This helps limit the impact of rising interest rates on your monthly payments.
Whether you’re building a home, buying a new or existing home, or renovating, this government-backed loan can be combined with other programs.
Depending on the location of your future purchase, you can borrow up to €30,000 for a maximum term of 25 years.
Local Assistance Programs
In addition to national programs, some large local governments have introduced additional assistance programs within their jurisdictions. The goal? To make it easier to become a homeowner in overheated local real estate markets.
Thus, the Albigeois Metropolitan Community is offering the “Prêt 1ère Clef” program, a 20-year interest-free loan. It aims to support first-time homebuyers with modest incomes who are already eligible for the national interest-free loan (PTZ). The amount of assistance ranges from €3,000 to €15,000, depending on household composition.
Such local initiatives exist in many cities, such as Toulouse and Bordeaux. Be sure to find out about opportunities near you or to check the ANIL website, which lists all available local financial assistance ! With 5 to 15% in additional financial assistance, that can make all the difference on a tight budget.
Reduced notary fees for new construction
One last significant benefit to consider: buying new-construction real estate allows you to save substantially on notary fees.
While these expenses often exceed 7 to 8% for existing homes, they are generally limited to 2–3% for new homes. The reason? Lower transfer taxes.
“In practical terms, for the same budget, you’ll be able to buy a higher-quality or larger property!”
With this comprehensive overview of the financial assistance available, you have everything you need to make your real estate project a reality.
Our team is here to assist you every step of the way: analyzing your situation, preparing applications for financial assistance, selecting the best properties for sale… For a personalized consultation, schedule an appointment at our office or contact us online today!
– L’Agencerie
