Zero interest loan

Initially scheduled to run until December 31, 2023, the zero-rate loan has been extended to 2027, with more flexible conditions of access, a higher maximum loan-to-value ratio and a narrower scope of application.

Definition

• This is a loan that complements a mortgage as part of a scheme to support home ownership.
• No interest (paid by the government) and no administration fees (except APR)
• The amount of the loan varies according to :

– The number of people destined to occupy the dwelling

– The resources of these people

– Geographical location

– The total cost of the operation

– Housing type

• It corresponds to a percentage of the cost of the real estate transaction.

Access conditions

• For first-time buyers. The zero-rate loan is granted to individuals who have not owned their main residence in the two years preceding the loan offer (except in the case of disability or natural disasters).
• Means-tested: there are four income brackets (depending on household size, geographical area and income).
• Purpose of financing: new principal residence, old residence to be renovated in rural areas, or sold by a social landlord to its occupant.

What’s new in 2024

French Finance Act no. 2023-1322 of December 29, 2023 for 2024.

Awaiting implementing decree.

Scope restriction

Applicable for :

• Buying a new multi-family home in a prime location
• Acquiring an older home with energy-efficiency renovations throughout France

Exclusion for single-family home construction.

Adjustment of the amount allocated

• Between 10% and 50% of the total cost of the operation (previously maximum 40%)
• Increase in state aid for social housing tenants wishing to buy their own home (up to 20%)

Changes to the income scale

• Increase in ceilings for the first two income brackets: from 7% to 30% depending on zone
• Creation of a fourth income bracket: up to €49,000 income per year/per person

Zone A :

Stage 1: €25,000

Stage 2: €31,000

Stage 3: €37,000

Stage 4: €49,000

Zone B1 :

Stage 1: €21,500

Stage 2: €26,000

Stage 3: €30,000

Stage 4: €34500

Zone B2 :

Stage 1: €18,000

Stage 2: €22,500

Stage 3: €27,000

Stage 4: €31,500

Zone C :

Stage 1: €15,000

Stage 2: €19,500

Stage 3: €24,000

Stage 4: €28,500

Amount of zero-rate loan on the total cost of the operation :

Tier 1: 50%

Tier 2 : 40%

Tier 3 : 40%

Tier 4 : 20%