A new state funding scheme in Spain aims to enable people to buy their first home if they can afford a mortgage but have not saved enough money for the standard down payment. Under the new “TU CASA” program, up to 50,000 euros is to be made available interest-free.
Spain Expat Press Editorial Team
by Marlon Gallego Bosbach
For many households in Spain, purchasing a home is not necessarily prevented by a lack of income, but rather by a lack of equity. Those taking out a standard mortgage often have to finance a portion of the purchase price themselves. The Spanish government is addressing precisely this hurdle with its new “TU CASA” mechanism.
The corresponding regulation was adopted via Royal Decree-Law 26/2026 of September 29 and published in the Spanish Official Gazette (BOE). The program is administered by the state-owned Instituto de Crédito Oficial (ICO).
Up to 50,000 euros for your first own apartment
The new model provides for an additional loan for individuals purchasing their first home as a primary residence and taking out a mortgage to do so. The state loan is intended to cover the lower of two amounts: 20 percent of the property value or 50,000 euros. This allows public funding to replace a portion of the equity that buyers would otherwise have to provide themselves.
For an apartment valued at €200,000, for example, up to €40,000 could be financed through “TU CASA.” For a property valued at €300,000, the funding would be capped at a maximum of €50,000.
The state funding is intended to supplement a private mortgage rather than replace traditional bank financing.
Interest-free and commission-free
A key component of the program is 0% interest financing. In addition, no commissions are to be charged for the government loan.
The repayment is also structured on a long-term basis. The loan can be repaid over a period of up to ten years. At the same time, the law provides for a repayment holiday that can match the term of the mortgage, though it is capped at 30 years.
This allows the repayment of the state loan to begin significantly later than the financing of the actual property purchase.
Not just for young buyers
The law does not specify a concrete, general age limit for “TU CASA.” Rather, the decisive factor is that the property serves as the applicant’s primary residence and is financed via a mortgage.
However, exactly who will meet the requirements has not yet been fully determined. The law stipulates that a further decision by the Council of Ministers will govern the specific target groups, limits, conditions, and the application procedure.
100 percent financing does not mean zero out-of-pocket costs
One point is particularly important for potential buyers: the new regulation does not automatically mean that an apartment can be purchased entirely without using one’s own funds. The “TU CASA” loan is intended to cover a portion of the purchase price; taxes and other costs associated with the property purchase must still be taken into account.
For instance, anyone buying a newly built apartment must factor in—in addition to financing the purchase price—costs such as applicable taxes and fees for the notary and the land registry. The new regulation thus primarily lowers the hurdle regarding the equity required for the purchase price.
Price maintenance applicable even to a subsequent sale
The state-subsidized housing units are to be permanently subject to special pricing regulations. Under the law, the price upon any subsequent sale generally may not exceed the original purchase price, adjusted in line with the Consumer Price Index (CPI). Certain renovation or improvement measures may be taken into account in accordance with rules yet to be established.
In accordance with the law, the price cap is stipulated in the purchase deed and entered in the land register. It applies permanently to apartments purchased under the “TU CASA” scheme. The aim is to link state-supported financing to a long-term limit on the sale price.
ICO takes over management
The Instituto de Crédito Oficial (ICO) is responsible for implementation. The state-owned institution is to manage the program separately from its other funds.
“TU CASA” is funded by the budget of the Ministerio de Vivienda y Agenda Urbana – the Spanish Ministry of Housing and Urban Development. However, the program can only be fully implemented once the outstanding details have been finalized.
Many details remain open
While the law passed on September 29 establishes the legal basis for the program, it does not yet set out all the practical requirements. A further decision by the Council of Ministers is expected to clarify, among other things, who is eligible to apply for the loan, which income and other criteria must be met, and which properties qualify for financing.
The precise funding limits, as well as the procedures for submitting and reviewing applications, also remain to be determined. In addition, the Council of Ministers is to decide on the program’s initial total volume. Thus, while “TU CASA” has been established by law, its details have not yet been fully worked out.
Response to the high barrier to entry for buying a home
Behind the program lies a specific problem facing the Spanish real estate market: it can be difficult for households to save up the necessary down payment, even if they generally have sufficient income to cover monthly mortgage payments.
“TU CASA” therefore aims to narrow the financing gap between the purchase price of an apartment and the mortgage amount granted by a bank. This state funding supplements the private loan and is intended, in particular, to make it easier to acquire one’s first home.
What buyers should know now
For prospective buyers, the new regulation primarily means three things: A portion of the equity previously required can now be covered by an interest-free government loan. At the same time, the usual ancillary purchase costs remain in place.
Moreover, this is not a grant available for unrestricted use. The money must be repaid, even though a long initial repayment holiday is possible. Furthermore, anyone who later sells an apartment financed through “TU CASA” is subject to a permanent price cap.
