How to choose and combine loans:

To buy, or buy and renovate an old building to be used as a dwelling you have the choice of several types of loan. You should therefore look at different ways of combining them.

  What principal loan are you entitled to take out ? State-guaranteed loan to low-income households, subsidised loan or ordinary bank loan ?

• The amount of the first two types of loan, the State-guaranteed loan to low-income households, subsidised loan is limited to 90% of the cost of the transaction, and interest rates vary from lender to lender, subject to a regulated maximum rate (the maximum rate for the PAS is 0.60% lower than that for the subsidised loan). They require a deposit of 10% of the cost of the transaction and the borrower may be entitled to personal housing assistance (APL), designed to reduce interest and repayment charges and insurance costs. To be entitled to take out this type of loan, the flat cost of the dwelling must not exceed a fixed ceiling per m2, set according to the geographical location. Moreover, the PAS is subject to other conditions regarding resources.

• Les When considering an ordinary bank loanit is important to use competition between banks to your advantage as much as possiblecompare lending costs. The larger the deposit you can make, the easier negotiation with the bank will be.When considering an ordinary bank loan it is important to use competition between banks to your advantage as much as possible and compare lending costs. The larger the deposit you can make, the easier negotiation with the bank will be.
  Deposit:
  The deposit can be made up of previous savings, a 0% loan, social support loans, a homebuyer's loan or a 1% loan.

 Additional loans:

• A 0% rate loan can be used to help finance the purchase of an old dwelling, but is subject to three draconian conditions: - you must not have owned your main residence in the last two years, - the dwelling must be more than 20 years old, - and the cost of renovation work carried out must equal at least 54% of the cost of the dwelling (not including additional expenses). It is therefore particularly suited to the purchase of an old and very dilapidated dwelling. The loan is subject to various resource and ceiling conditions, and you can request one from any lender that has signed an agreement with the government. Under no circumstances may such a loan be used as the main method of finance. The loan is repaid through fixed monthly repayments. The duration of repayments varies, depending on your taxable income, and in some cases repayments will start only once other loans have expired.

• The homebuyer's loan is granted after a period of saving, through either a homebuyer's savings account or a homebuyer's savings scheme. The amount of the loan depends on the interest earned during the saving period and the duration of the loan. The interest rate is regulated, and has recently been reduced. Homebuyers' saving schemes taken out since 27/07/99* earn interest at 3.60% and entitle the saver to a maximum loan of F600,000, at a rate of 4.31%. Interest on homebuyers' savings accounts is now 2.25%. The maximum amount that can be borrowed is F150,000, at a rate of 3% in the case of a right to a loan linked in with interest earned from 01/08/99. The rate of loans linked in with rights acquired before this date remains unchanged. Homebuyer's Savings Schemes and Savings Accounts can have a duration of 2 to 15 years and can be combined, providing the total sum does not exceed F600,000. Under certain conditions you can also apply the loan rights obtained by close relatives from their own homebuyer's savings to increase the sum you borrow. * For Homebuyer's Schemes and Accounts started up before this date the interest rate remains at the rate set when the scheme was started.

• The 1% employer loan * applies to employees of a private company with a workforce of more than 10 people. The loan sum is regulated and at the end of 98 the fixed interest rate was lowered from 2% to 1.5%. It can be used to finance the purchase of an old dwelling not requiring renovation work: - where the borrower is a first-time buyer of his main residence, with a limited income - where the borrower is forced to change his place of main residence for reasons of job mobility. - or where he is buying a low rent dwelling. It can be granted regardless of the borrower's resources, but the dwelling must have been completed more than 20 years ago and the cost of renovation work must be equal to at least 25% of the purchase price. - Complementary department loans are granted by some Conseils Généraux, with interest rates and amounts lent varying from 2 to 5% and F10,000 to F80,000. - Complementary department loans are granted by some Conseils Généraux, with interest rates and amounts lent varying from 2 to 5% and F10,000 to F80,000. - Details of loans from mutual societies and retirement funds can be obtained from the relevant affiliated organisations. - Family loans: loans between members of the same family are legal, and there is no reason why the interest rate payable should not be zero or indexed to the Livret A savings account rate. But in order to prevent the tax authorities from viewing the loan as a concealed donation, draw up a contract and register it with the tax revenue authorities.