What is 0% financing?
Since 1995, zero percent financing has helped French households acquire their main home. Zero percent financing helps you finance part of the purchase or construction of your future home.
To be able to benefit from this arrangement, you have to have income below a certain level. You cannot have been an owner either for the two years before the loan. The amount accepted at 0% interest depends on the area of your future home. Of course, you can obtain an additional loan or loans to finance the rest of the cost.
The arrangement has been extended until 2021 since the 2018 Finance Law. However, several key changes will be made in 2020 in comparison to the 2019 situation.
0% interest loans: what will change in 2020
Each year there are changes and adjustments to this loan. As we look forward to 2020, the government has announced a gradual limitation to this scheme. The loan will gradually focus on major cities. For loans granted after 1st January 2020, the amount granted at 0% interest may represent:
- 40% of the cost of the project in zones B1 and A (large cities and the surrounding areas), or in former military centres which need to be given new life (communes signed up to the CRSD scheme involving new property;
- 40% of the cost of the project in zones B2 and C (rural areas and smaller towns) for older property as long as the work represents 25% of the cost of the project.
As for new property, the loan is used to finance property projects in areas located in zone A (2), A or B1 or in former military towns:
- The construction of a home with or without fees on the construction or acquisition of the land;
- The purchase of a property that will be occupied for the first time, with or without work to be done;
- The transformation of existing premises into a home (example: change of use from commercial property into residential property);
- The construction or simultaneous purchase of out-buildings (garage, parking space, …).
NB: The loan can also be granted in the case of a lease agreeement.