Guarantees from the Official Credit Institute (ICO) have become an essential tool in Spain, offering financial backing that facilitates access to loans. They are a good option for young people and families with dependent children who wish to purchase a home; with the backing of this guarantee, they can secure financing for up to 100% of the home’s price.
ICO guarantees are assurances that the Official Credit Institute provides to financial institutions to facilitate access to financing for self-employed individuals and businesses. These guarantees allow banks and other lending institutions to grant loans at a lower risk, since, in the event of default, the ICO commits to assuming part of the liability. This translates into more favorable terms for the borrower, such as lower interest rates and more flexible repayment terms.
In Spain, in May 2023, the Council of Ministers approved a line of ICO guarantees of up to 2.5 billion euros to facilitate the purchase of a first primary residence for young people and families with dependent children. Generally, the amount of a mortgage loan is 80% of the home’s value, requiring the buyer to come up with the remaining 20%, which can sometimes be very difficult. ICO guarantees cover this 20% of the mortgage amount, allowing applicants to obtain financing for up to 100% of the home’s price.
ICO guarantees are designed to facilitate access to financing for various purposes; currently, this guarantee is offered for the purchase of a first home. This is a guarantee program aimed at helping approximately 50,000 people purchase their first home—people who have been unable to save the necessary amount for a down payment on an apartment.
ICO loans offer attractive features:
The way ICO guarantees work is relatively simple:
Currently, ICO guarantees are available to young people under 35 and families with dependent children who wish to purchase a home in Spain. The guarantees facilitate home purchases, as they allow applicants to obtain financing for up to 100% of the home’s price.
These are the requirements to qualify for ICO guarantees when purchasing a home in Spain:
Be under 35 years of age or have dependent children.
Have an individual gross annual income of up to 37,800 euros. If there are two beneficiaries per home, the total income limit is 75,600 euros. For families with dependent minor children, the limit increases by 0.3% for each child. For single-parent families, the increase is 70%.
Not be in arrears. You must not have overdue debts or unpaid obligations to the government, financial institutions, or Social Security.
Have assets totaling less than 100,000 euros.
You must not own another home, although some exceptions are made, such as having inherited a property that is shared equally with others.
It is important to note that, during these first ten (10) years, the home must be the primary residence of the person receiving the guarantee; it may only be rented out if circumstances arise that justify the need to change addresses.
Before taking the next step, it’s a good idea to have a clear, quick overview of the ICO 2026 guarantee—the guarantee that the Official Credit Institute makes available to young people and families to facilitate the purchase of a primary residence. The main requirements revolve around four key areas: the applicant’s profile (being under 35 years of age or having dependent children), income (which must not exceed the established individual or joint limits), net worth (less than 100,000 euros), and residence (the home must be the primary residence for the first 10 years). Added to this are the key terms of the guarantee: financing can cover up to 100% of the home’s price, the cost of the guarantee itself is zero for the applicant—although interest is paid on the principal borrowed—and all of this is handled through banks participating in the program, that is, the financial institutions that have committed to the ICO to offer this line of credit.
Almost all financial institutions in Spain that operate in the loan and mortgage sector can offer ICO guarantees. On the ICO’s website, there are 60 institutions that have committed to offering the government’s mortgage guarantee. Among them are several of Spain’s largest banks, such as Banco Santander, CaixaBank, BBVA, Banco Sabadell, Abanca, Ibercaja, Unicaja EVO Banco, and Cajamar; as well as institutions like UCI, Arquia Bank, and Banca Pueyo, and most rural credit unions.
ICO guarantees can be applied for at any time, provided the program is active. The deadline for finalizing mortgage loans with the lending institution is December 31, 2025, although this may be extended until December 31, 2027, depending on demand. You can request general information from your financial institution or on the ICO website.
As with any process, there are advantages and disadvantages. Let’s take a look:
The advantages of applying for an ICO guarantee to purchase a home are:
On the other hand, ICO guarantees have the following disadvantages:
Before going into detail on each frequently asked question, it’s helpful to briefly review the most common concerns. What is the purpose of this program? To help people who haven’t been able to save the 20% down payment typically required for a conventional mortgage. What is the advantage of the guarantee? It allows you to finance up to 100% of the home’s price without needing those prior savings. Who can apply for these guaranteed loans? People under 35 and families with dependent minor children who meet the income and asset requirements. What additional requirements must applicants for this guaranteed financing meet? They must not be in default on any loans and must use the home as their primary residence for at least 10 years. Can I qualify for these loans if I already own a home in Spain? Generally speaking, no, except in cases such as a shared inheritance divided equally among other people. What is the maximum amount of the guaranteed loan? The lower of the purchase price and the appraised value of the home, always within the applicable regional limits. And what is the coverage and duration of the guarantee? It covers 20% of the mortgage amount for the first 10 years after the loan is signed.
There is no specific limit on the number of ICO guarantees a person can apply for, but each application is evaluated individually. However, it is essential that the applicant demonstrate the ability to repay in each case.
ICO guarantees are not “repaid” as such, since they are not a direct loan but rather a guarantee for a loan granted by a financial institution. Likewise, it is important to fulfill the obligations of the guaranteed loan—that is, to make payments to the financial institution.
The ICO guarantee carries no additional cost; in other words, you do not have to pay the government or the ICO for providing the guarantee. However, keep in mind that you will pay interest on the money borrowed from the bank for the mortgage, including the 20% guaranteed by the government—or 25%, in cases where the purchased home has an energy efficiency rating of D or higher.
When a mortgage payment is missed, the bank or financial institution initiates foreclosure proceedings to recover the money lent. The process involves auctioning the home, and the proceeds will be used to pay off the debt.
If the proceeds from the sale of the home are not sufficient to cover the debt, the ICO may enforce the guarantee and demand repayment of the debt from the applicant.
Therefore, it is very important to be certain that you can afford the mortgage payments before applying for the loan. It is equally important to have life and unemployment insurance, which could help cover the mortgage payments in the event of default.
The amount of the ICO-guaranteed mortgage loan cannot exceed 100% of the lower of the appraised value and the purchase price of the home (whichever is lower). This means that when you apply for an ICO-guaranteed mortgage, the financial institution will use the lower of the two values as a reference to determine the maximum loan amount. Additionally, this amount is subject to a regional limit, as each autonomous community has a maximum price applicable to the purchase of a home.
The duration of an ICO guarantee may vary depending on the financing program and the specific terms of the loan. In the case of the guarantee provided by the ICO for mortgages, it is valid for 10 years from the date the loan is formalized. If the mortgage term exceeds 10 years, the guarantee will only cover the first 10 years.
The ability to renew or extend an ICO guarantee depends on the regulations in effect at the time of the request and the conditions established by the ICO. If you wish to extend an existing guarantee, it is advisable to consult with your financial institution to learn about the specific requirements and the procedure to follow.
More questions arise as the process moves forward, so it’s worth addressing them as they come up. Which banks offer the 2026 ICO guarantee? Most financial institutions participating in the program—including Banco Santander, CaixaBank, BBVA, Banco Sabadell, and Ibercaja—continue to offer this line of credit. What are the requirements to apply for an ICO guarantee in 2026? The same ones already detailed: age or dependent children, income limits, no delinquency, assets under 100,000 euros, and not owning another home. When do the ICO guarantees end? The current deadline for finalizing mortgage loans is December 31, 2025, although it could be extended to December 31, 2027, depending on demand. How are ICO guarantees repaid in 2026? They are not repaid as a separate loan; rather, the applicant simply makes the mortgage payments to their financial institution. In summary, what are they and what is their advantage? They are government guarantees that reduce the risk for banks and allow applicants to access 100% financing without having to have savings. And who can apply for ICO guarantees? Young people under 35 and families with dependent children who meet the other requirements. Among the terms to keep in mind, it’s important to remember that the guarantee covers only the first 10 years of the mortgage, so it’s wise to plan with that deadline in mind.
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ICO guarantees represent a valuable alternative for people seeking financing in a challenging economic environment. If you’re considering applying for an ICO guarantee, make sure you meet all the necessary requirements to maximize your chances of success.
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León XIII, 27
Funded
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Target
507.697,35 €
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