The Prima Casa program needs reform, as it currently creates a long-term burden on public finances and drives price increases in the market – IPRE
This is stated in the analytical note "What Should the Future Prima Casa Program Look Like?" prepared by the Institute for European Policies and Reforms (IPRE), in the context of the suspension of the state mortgage program's compensation component after the annual budget of 130 million lei was exhausted in just three months. IPRE believes the problem is not due to a lack of budgetary funds, but to the need to reform the program, which has expanded significantly over its eight years of operation and is creating a long-term burden on public finances. IPRE expert Stanislav Ghilețchi notes that the program has generally achieved its goals, contributing to the development of the mortgage lending market and helping thousands of families acquire housing. However, according to the author, the continued operation of the program in its current form risks transforming the social policy instrument into a mechanism for general support of demand in the real estate market. Since the program's launch, over 8,000 residential properties have been purchased, and approximately 6,400 beneficiaries continue to receive monthly compensation. Moreover, in the second quarter of 2025, the Prima Casa Plus program accounted for more than half of the new mortgage contracts issued by banks, which, according to IPRE, indicates that the program has expanded beyond its initial target beneficiaries. The expert warns that the current compensation costs the state approximately 150 million lei annually and will remain in effect for another 20-30 years. The program, in its current format, is driving up housing prices, as stimulating demand against a backdrop of limited supply drives up real estate prices. For example, the Residential Real Estate Price Index (RPPI) reached 226.7% in the fourth quarter of 2025, an increase of 26.8% compared to the previous year. Another issue is the expanding circle of beneficiaries, including those in the liberal professions and buyers of homes priced up to 2.5 million lei, which already falls within the mid- to upper-middle-class market segment. The expert recommends refocusing the Prima Casa program on a limited number of priority categories of citizens, abandoning the monthly compensation mechanism, and reinstating a more conservative level of debt burden. Specifically, it is proposed to maintain state support primarily for young families with three or more children, as well as public sector employees in sectors with chronic labor shortages, such as education and healthcare. In his opinion, it is for these categories that state participation has a clear socio-economic justification. Instead of capping housing prices, the experts recommend introducing an income threshold for program participants, calculated as a multiple of the average salary in the economy, with automatic annual adjustments based on data from the National Statistics Bureau. It is assumed that in this case, the acceptable level of debt burden will determine the affordable price of housing. It is also proposed to abandon the monthly mortgage compensation and replace it with a one-time grant for the down payment. IPRE also believes the 2024 decision to increase the maximum debt burden from 50% to 70% of net family income is a mistake – this level makes households more vulnerable to job loss, rising interest rates, or unexpected expenses, including medical ones, and therefore proposes returning it to its previous level. // 09.06.2026 - InfoMarket
