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0% Eco-Loan | version française |
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The 0% Eco Loan is a loan supported by the French government to
finance energy-saving works in "old" properties (i.e. built
before 1990). The purpose of renovation work done under this program
is to reduce energy consumption and greenhouse gases and promote the
use of renewable energy sources. In order to ensure that this is the
case, the Eco Loan must, except for special circumstances, be used to
finance either a "package" of at least 2 renovation actions,
or, alternatively, work to improve the overall energy performance of a
property, as measured by an approved expert. The Eco Loan can be
granted either to private individuals or, as from January 2015, to a
collective body (i.e. the residents association).
The borrower pays neither interest nor administrative costs to the
lender. The loan interest is financed by the State which gives the
lender a tax credit to make up for the interest payments foregone.
The lender is however entitled to require the borrower to take out
invalidity and death insurance. It may also require security for the
loan, the cost of which is borne by the borrower.
The 0% Eco Loan may also be combined, for a simultaneous first-time
purchase, with the provisions of the 0% mortgage (PTZ), which may
itself be combined with any other loan, subject to all such loans
being compatible with each other.
The Eco Loan may also be combined with the Energy Transition
("transition énergétique") tax credit
("CITE" formerly known as the CIDD) subject to the borrowers
not be earning more than a certain amount (€25,000 for single
persons, €35,000 for married couples or in a civil union). For
loans signed in year N, the maximum earnings amount is calculated with
respect to year N-2.
Lastly (see below), a private individual who has received an Eco Loan
can also be a member of a collective body which has received an Eco
Loan.
The beneficiaries of the Eco Loan
Individual Eco Loan: the borrower can be either a
physical person or a "société civile
immobiliere", a kind of property investment companies (a
non-trading company not subject to corporation tax whereby one of the
company's shareholders must be a physical person). The borrower
must own the property and either occupy it as his main residence, rent
it out or put it, at no cost, at the disposal of a third party who
occupies it as his main residence (i.e. for at least eight months a
year). The property can be a house or an apartment.
Persons applying for the Eco Loan are not means tested.
Only one Eco Loan can be granted per property, even if the owner
changes, and regardless of the amount of the Eco Loan granted.
Collective Eco Loan: as of January 2015, Residents
Associations ("syndicats de copropriété") are
eligible for a specific Eco Loan ("éco-prêt
copropriétés") of which the purpose is to finance
energy renovation work relative to common areas of the property. This
loan can be used to finance the same types of renovation work as the
Eco Loan granted to private individuals, with however the important
difference that this collective Eco Loan can only be used to finance
one or more of 6 specific types of renovation actions. Each co-owner
is free to participate, or not, in the collective Eco Loan, or to
finance his share of the renovation work using alternative funds.
Combining an individual Eco Loan and a collective Eco
Loan:
An individual Eco Loan may be granted to a borrower to finance his
share of the works decided by the Residents Association of a property
jointly owned by one of the borrowers, said works concerning common
areas and facilities or private areas accessible to joint owners. If
the borrower wishes to have separate works done in his own property at
the same time as the works carried out for the Residents Association,
such private works may be financed via an individual Eco Loan, up to a
ceiling fixed by decree (see "Financial Terms" below).
However, should the borrower wish to bring forward or defer the
private works in relation to that done to the whole property on behalf
of the Residents Association where the borrower is one of the owners,
then the two types of works cannot be successively financed by an
individual Eco Loan and the owner must choose which work he wants
financed by a 0% Eco Loan.
An individual Eco Loan granted as part of an operation concerned by a
collective Eco Loan must be taken out within no more than 1 year
following the issuing of the collective Eco Loan offer. And, in this
specific case, the individual Eco Loan can only be used to finance
just one renovation action instead of a "package" of
renovation actions. Lastly, the total amount of the 2 loans (i.e.,
individual Eco Loan and collective Eco Loan) cannot exceed
€30,000 in relation to a given property.
Qualifying transactions
The loan may be granted to finance energy-saving work professionally
carried out in a property built before 1990 (in mainland
France); work must not begin before the loan offer is issued. Since 1
October 2014, the contractors carrying out the renovation work must
have the "RGE" label (reconnu garant de l'environnement,
a specific label granted to trained contractors).
The work can be:
Specific technical performance standards must be observed in all cases listed above.
Financial terms
Individual Eco Loan: there is no minimum amount,
other than that required to carry out substantial renovation. The
maximum loan amount is €30,000.
The amount is limited according to the type of works (see list above)
done by the borrower:
If an individual Eco Loan is combined with a collective Eco Loan, then
the loan can only be used to finance one single action of the
"package", and is limited to €10,000.
Collective Eco Loan: the maximum amount of such
loans is given by multiplying 2 elements: the number of individual
properties participating in the collective Eco Loan by the sum of
€10,000 per renovation action financed up to a maximum of 3
actions. For example, if a condominium comprising 50 individual
properties were to finance 2 renovation actions, and if all the
individual properties were to participate, then the total maximum
amount of the eligible collective Eco Loan would be €10,000 x 2 x
50 = one million euro.
In all cases, the loan amount is limited to the cost of the works,
duly proved by production of the bills. It includes the cost of any
studies and required related work (such as electrical or repainting
work rendered necessary by the main renovation work).
The loan repayment terms are determined on the date of issue of the
offer. The loan is repaid by constant monthly payments throughout a
"basic" repayment period of 120 months (180 months for
projects involving 3 renovation actions or overall energy-performance
work). The borrower may request that the repayment period be reduced,
and the bank is free to accept or decline this request. In any case
however, the repayment period cannot be reduced to less than 36
months.
The renovation work must be carried out within the 2 years following
the issuing of the related loan (3 years in the case of collective Eco
loans).
The State has made SGFGAS responsible for determining the factors used
to calculate the tax credit relative to loans granted by lenders, doing
so in accordance with the provisions of articles R.319-9 and R.319-10
of the French Building and Housing Code and for transferring the
results of these calculations to the lender and the tax authorities
Eco Loan in French overseas territories (Guadeloupe, Martinique,
Guyane, La Réunion, Mayotte)
A special Eco Loan for French overseas territories was established in
2011. It provides funding for works specific to the climatic
conditions in these territories (protecting roofing, walls and windows
against solar radiation). The renovation work can consist in a number
of specific actions selected from a package or general work to improve
the overall performance. Non-collective sewage work is also eligible
for funding. Since 1 January 2015, properties for which the building
permit was submitted before 1 May 2010 are eligible. As from 1 October
2015, the contractors used to carry out the work must have the
"RGE" label.
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