Citizenship scheme to help people who are ineligible for life insurance to get home loan

Funds from Malta’s passport scheme will be used to help those who cannot get life insurance owing to a past medical condition, be able to get a home loan, the government announced on Wednesday.

The new scheme, announced by Prime Minister Robert Abela and Social Accommodation Minister Roderick Galdes, will see around 40 individuals or families who are not eligible for a home loan because they do not qualify for life insurance owing to past medical conditions be helped by the state.

A life insurance policy is a mandatory pre-requisite for people to qualify for a home loan from a bank, but there have been cases where people cannot get such a policy – or are quoted a policy at triple the price of other people – because they suffered from a medical condition in the past or suffer from a disability.

To make up for this, the state will act as the guarantor for the applicant – hence making up for the lack of a life insurance policy.

The guarantee being offered will cover a home loan of up to €250,000 for a property which is intended as the person’s primary residence, Galdes explained in the press conferences.

The people eligible for this scheme are those who have had their life insurance application either been refused by two local insurance providers, or postponed by 12 months or more, or were given a quotation where the premium is unaffordable.

Applicants will need to present documentation from their doctor detailing their medical condition to the Housing Authority, which will then coordinate with the Commission for the Rights of People with Disability (CRPD) to verify the documents and research the applicants to make sure that no abuses take place.

A recommendation letter will then be issued by the Housing Authority, which can be presented to the applicant’s bank as the guarantee.

The beneficiary of the scheme will be asked to pay a yearly or monthly participation fee.

The scheme will be financed by a back-to-back guarantee courtesy of the National Development and Social Fund (NSDF) – which is funded by Malta’s controversial passport-selling programme.

€3 million will be made available as part of the scheme – enough to cover home loans worth a total of €30 million, Galdes explained.

“We are giving a new sense of hope and dignity to everyone,” the social accommodation minister added.

“I want to send the message that this is a country where everyone has to have opportunity to reach their aspirations and make their dreams a reality,” Prime Minister Abela said when introducing the scheme.

He said that the reality is that however much the country moves forward, there are still sections of society who will not be able to reach where they want to reach without help – and this is where the state will step in in a sustainable manner.

Abela said that action on this scheme had started when he met a person who had recovered from a serious illness in their childhood and was now working a stable job and ready to take the next step and buy a property where they can build a family.

He said that this person had everything in place for a home loan, but was met with a “smack in the face” when their life insurance policy was not granted.

Now, he said, the scheme will allow everyone to have a sense of dignity, and to fulfil their dreams.