Rented housing legislation

Interest subsidies and guarantees

The state supports the production of affordable and social rented housing by paying interest subsidies on loans taken out for this purpose and issuing a state guarantee for them. These loans, known as long-term interest-subsidy loans, generally have a loan period of 40 years. During this time, tenants must be selected on social grounds and the rent must be determined based on the cost price principle. Further provisions on the terms of interest subsidy loans are laid down in Government Decrees. Buildings financed with interest subsidy loans must be managed through joint management by residents and owners. Provisions on the joint management of buildings are laid down in a separate Act.

  • Act on Interest Subsidy for Rental Housing Loans and Right of Occupancy Housing Loans 604/2001 (Finlex)
  • Government Decree on Interest Subsidy for Rental Housing Loans and Right of Occupancy Housing Loans 666/2001 (Finlex), Memorandum 13 June 2018 (new loan terms, in Finnish) and 16 September 2016 (temporary reduction of deductibles, in Finnish)
  • Government Decree on the Selection of Tenants for State-Subsidised (ARAVA) and Interest-Subsidy Rental Dwellings 166/2008 (Finlex), Memorandum 12 March 2008 (in Finnish)
  • Government Decree on the Input of Profit by Recipients of State-Subsidised Housing (ARAVA) Loans and Interest Subsidy Loans 1371/2016 (Finlex, in Finnish), Memorandum 15 December 2016 (in Finnish)
  • Act on Joint Management of Rental Buildings (649/1990)

It is also possible to be granted a short-term interest subsidy loan for affordable and social rented housing production. The loan period for short-term interest subsidy loans can be between 10 and 30 years. Interest subsidies always come with a state guarantee. More detailed provisions on the conditions for loans and subsidies are laid down in a Government Decree.

  • Act on Short-term Interest Subsidies for Rental Housing Construction Loans 574/2016 (Finlex, in Finnish)
  • Government Decree on Short-term Interest Subsidies for Rental Housing Construction Loans 603/2016 (Finlex, in Finnish), Memorandum 1 July 2016 (in Finnish)

The state can also grant separate guarantees for loans used to build rental housing. The maximum guarantee period is 30 years, and the guarantees are subject to a guarantee fee. Additional interest subsidy loans for rental housing were also granted in 2009 and 2010 to help boost employment in the construction sector.

  • Act on State Guarantees for Rental Housing Loans 856/2008 (Finlex, in Finnish)
  • Act on Interest Subsidies for Rental Housing Construction in 2009 and 2010 to Promote Employment in the Construction Sector 176/2009 (Finlex, in Finnish)

State-subsidised housing loans (ARAVA loans)

State-subsidised housing (ARAVA) loans have been replaced by interest subsidy loans. Although new ARAVA loans are no longer issued, most of the housing stock and loan portfolio financed with ARAVA loans still exists. Tenants of ARAVA-financed housing must be selected on social grounds and the rent must be determined based on the cost price principle. More detailed provisions on the conditions for ARAVA loans and subsidies are laid down in Government Decrees.

  • Act on State-Subsidised Housing Loans (ARAVA Act) 1189/1993 (Finlex)
  • Act on the Use, Assignment and Redemption of State-Subsidised (ARAVA) Rental Dwellings and Buildings 1190/1993 (Finlex)
  • Decree on State-Subsidised Housing Loans (ARAVA Decree) 1587/1993 (Finlex), Memorandum 19 December 2018 (electronic residential and commercial property information system, in Finnish) and 31 December 2016 (purchase price rent, in Finnish)
  • Government Decree on the Selection of Tenants for State-Subsidised (ARAVA) and Interest-Subsidy Rental Dwellings 166/2008 (Finlex), Memorandum 12 March 2008 (in Finnish)

Various support measures are in place for owners of state-subsidised dwellings facing financial difficulties. The targets of such support measures are usually rental housing companies located in areas with shrinking populations. The support measures can include changes to the terms of ARAVA loans, easing the restrictions on use and assignment of apartments or granting funds for reorganisation or demolition. The State Treasury is responsible for these measures.

  • Act on Changes to the Loan Terms of State-Subsidised (ARAVA) Loans in Certain Cases 1023/2002 (Finlex, in Finnish)
  • Act on Changes to the Loan Terms of Certain Rental Housing Loans Based on a Notification 511/2005 (Finlex, in Finnish)
  • Government Decree on Reducing the Interest Rate in Connection with Changes to the Loan Terms on Rental Housing Loans Based on a Notification 512/2005 (Finlex, in Finnish)
  • Act on Releasing Rental Dwellings Financed with Interest Subsidy Loans from Restrictions on Use 291/2005 (Finlex, in Finnish)
  • Act on State Guarantees for the Repayment of State-Subsidised Loans 868/2008 (Finlex, in Finnish)
  • Act on Reorganisation Subsidies for Rental and Right-to-Own Housing Companies 1030/2008 (Finlex, in Finnish)
  • Government Decree on Subsidies Granted for the Demolition Costs of State-Subsidised Rental Buildings 79/2006 (Finlex, in Finnish), Memorandum 24 January 2019 (conditions for granting subsidies, in Finnish) and 9 December 2016 (amount of the subsidies, in Finnish)
Published 2013-03-20 at 15:13, updated 2019-07-30 at 9:25