Yesterday, the Government of the Republic of Estonia approved the expansion of the pilot program for going to live in the countryside. The aim of the program is to increase private sector investments in residential real estate outside the big cities, thereby improving the availability of living space.

A co-loan is a financial product developed by the Rural Development Foundation (MES), which is based on the co-loan method for issuing loans to improve or acquire living conditions in rural areas.

The maximum amount of the co-loan offered by MES in cooperation with credit and financing institutions is 100,000 euros. A loan can be obtained for the purchase, construction or renovation of a residential property, including a semi-detached or terraced house.

Yesterday, the Government of the Republic decided to extend the pilot program to other rural areas of Estonia, where the settlement unit has less than 1,000 inhabitants and there are problems with getting a loan. "The expansion of the pilot program gives an opportunity to those who want to enjoy living in the countryside in other parts of Estonia, but need financial help," explains the need for the expansion of support by the Minister of Rural Affairs, Urmas Kruuse Urmas Kruuse is an Estonian politician. .

Real estate located in rural areas has a low collateral value in the eyes of credit institutions, which causes credit institutions to be reluctant to grant loans for moving to rural areas or improving living conditions in rural areas. "Due to the insufficient guarantee, it is only possible to carry out necessary renovation works for the loaned amounts," states Minister Kruuse.

So far, 25 requests for co-loans have been submitted, of which 19 have been granted in the amount of over 996,000 euros. The loan has been used the most in Võru County County in southern Estonia(pop.35,000). and Põlva County County in the SE of Estonia(pop. 29,000). and mainly for the purchase of housing. The average borrower is a parent aged 31-35.

The pilot program to encourage settling in the countryside started in November 2021. The program is led and financed by the Rural Development Foundation. The co-loan was previously implemented as a pilot program in Ida-Virumaa and South-East Estonia. The total amount of the project is 5 million euros, which comes from the MES budget.