Owning their own home is a dream for many young people, but more and more often it is coming up against a harsh reality. These are high real estate prices, mortgages that are difficult to obtain and uncertain economic prospects. In these cases, there is a way out that is not talked about much: a favourable loan from the state.
If you are under the age of 40 and are planning to buy, build or renovate a property and do not want to pay exorbitant interest, beware. The State Housing Development Fund (now part of the Ministry of Regional Development) offers programmes that can help you get an interest-free loan from the state or a very favourable home loan with low interest and a long repayment period.
The state as a housing helper
It may sound like utopia, but the state can actually be a partner when you want to address your housing situation. Not in the form of donations or non-repayable subsidies (although these sometimes exist), but through soft loans – and sometimes even completely interest-free housing loans.
One of the best-known instruments is the State Housing Development Fund, which has been operating under the Ministry of Regional Development since 2020. Yet people often associate it with terms such as state mortgage, interest-free state loan or state youth loan.
The aim of these programmes is not only to promote housing affordability, but also to stabilise young families, revive construction and address housing problems. The state mortgage is intended to be a kind of counterbalance to expensive commercial mortgages and to help mainly those who cannot afford a regular loan or who would find it too disadvantageous to repay.
At present, the state offers in particular the “Own Housing” programme , which builds on earlier support under the State Housing Development Fund. This programme targets:
- young people and families under 40,
- applicants who are buying their first property for their own home,
- people planning renovation or construction.
The soft loan is provided directly by the state, not through a bank. The advantages are low or zero interest, the possibility of deferring repayments and no hidden fees.
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Are you interested in a government home loan and want to make sure everything is done legally correctly?
Contact our law firm. We will help you through the entire process safely, efficiently and without unnecessary mistakes. We will advise you on whether you are entitled to benefits and how to defend yourself if the state refuses to provide them.
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Who can apply for a state loan?
State support programmes are mainly aimed at young people under 40 who want to buy or renovate their first home. The aim is to promote demographic growth, housing affordability for families and a boost in construction.
The most common requirements:
- age of the applicant (usually under 40),
- purpose of use (first home, construction, purchase of an apartment or house, renovation),
- proof of income,
- czech citizenship or permanent residence.
It is therefore not a benefit to which everyone is entitled, but a convenient form of credit where the main motivation is low or zero interest and favourable repayment conditions. The specific requirements should always be checked with the individual programme.
Own home programme: interest-free loan for young people
The programme that deserves the most attention isthe Own Housing Programme , which is not open in 2025. This programme primarily targets families with children and young individuals. It offered up to CZK 750 000 for the reconstruction of a flat or up to CZK 2 million for the purchase of a flat or the construction of a family home.
The main advantages:
- interest rate from 1.99%, in some cases zero (for example, if a child is born during the repayment period),
- repayment period up to 30 years,
- possibility of deferring repayments, e.g. during parental leave,
- no early repayment charges.
The money could be used to buy a plot of land, build a house, buy a flat, or renovate an existing property. However, the condition was that the property was actually used by the applicant for their own living.
Instead of this program, which the state did not open this year, it is focusing on promoting affordable rental housing through programs such as Affordable Rental Housing. This program offers low-interest, extended repayment loans for the construction, renovation, or acquisition of units intended for rental housing.
Government mortgage vs. conventional mortgage
Some people confuse a “state mortgage” with a conventional mortgage loan from a bank. The difference is crucial – the state will lend you less money, but with much better terms. In addition, with a government loan, you don’t need to have such a high income or guarantee a second property.
| Parameter |
State loan |
Bank mortgage |
| Interest |
0-2 % |
4-6 % |
| Maturity |
up to 30 years |
up to 30 years |
| Fees |
none |
by bank |
| Purpose |
limited |
wider use |
| Early repayment |
free |
often subject to a fee |
The ideal is to combine the two products – for example, use a government loan for the basic funding and top up the rest with a mortgage from the bank. The result is a lower repayment and better cash flow.
Tip for article
Tip: Take a look at the list of grants for entrepreneurs that can make it easier for you to do business. In addition to the OPTAK programme or grants from the Modernisation Fund, you can also take advantage of many other grants and contributions.
Legal aspects of state loans
Even if a loan from the state is advantageous, it is still a legally binding loan. You need to enter into an aid agreement which sets out clear conditions:
- the amount and purpose of the loan,
- the repayment terms and the possibility of deferment,
- the method of security – often in the form of a mortgage on the property,
- penalties for breaching the conditions (e.g. using the funds for another purpose),
- the possibility of control by the Authority.
We therefore recommend that you read the contract carefully and ideally consult a lawyer, especially if it is a larger loan or a more complex life situation.
For example, if you pay off your mortgage early, you may get into a dispute with the authority if you do not report a change of use of the flat (e.g. renting it out).
Where and how to apply for a state loan?
Most programmes are now administered by the Ministry of Regional Development, specifically the Housing Policy Department.
Step by step:
- Find out if you meet the conditions (age, income, purpose of the loan).
- Prepare documents: ID card, proof of income, project documentation.
- Submit the application – electronically or in person.
- Wait for approval (may take several weeks).
- Signing the contract, drawing the funds.
What’s next?
The government plans to extend support to other groups:
- single mothers and single parents, who are often not creditworthy enough for a mortgage,
- the elderly who want to renovate their homes and live in dignity,
- low-income households at risk of housing distress.
At the same time, it is being considered to digitise the whole system, simplify the application process and better link it with other forms of support (e.g. subsidies for insulation, solar panels, etc.).
A state loan for young people, an interest-free loan from the state or another soft loan for housing may be the thing that decides whether the dream of owning an apartment becomes a reality. Although it is not a support for everyone, it is a crucial help for many people.
But before you sign a contract, make sure you understand all the legal terms and conditions – and if you’re hesitant, talk to the experts. We’ll be happy to help – whether it’s checking the contract, representing you in negotiations or explaining the risks.
