Israeli Housing

Purchasing an apartment in Israel seems like an uphill battle - especially when you need to take a mortgage. However, many many families have overcome this hurdle and have the property to prove it. Check out these statistics: Over 87% of all immigrants who arrived in 1989 have bought apartments. In general, 72% of all Israelis own their own apartment (one of the highest percentages in the western world). Sometimes purchasing takes some creative thinking and financing.

To start with, olim have the right to take a government subsidized mortgage. Because this mortgage covers merely a fraction of the cost of a house, the question is how to finance the rest. On top of that, property sellers and banks in Israel generally demand a larger down-payment than in other countries.

Almost everyone who declares themselves an oleh takes the government loan because part of it turns into a grant so it's free money.

Some banks give 75% of the value of the residence, with two guarantors. If your monthly payment is less or equal to a third of your net income (both spouses) you can get 80%. This has nothing to do with your immigrant status. These rules are the same for Born Israelis and for New Immigrants.

With respect to mortgage banks -- keep shopping around, and try to convince them what great financial potential you have ("I'm new, so I'm just making X, but my husband/wife and I are both educated, soon be making more, etc.").

Differences exist even with respect to the government oleh mortgage, which is supposed to be governed by regulation. A bank may want 3 guarantors (2 working), while a smaller and more flexible bank may settle for 2 guarantors (1 working). Don't give up easily: negotiation and persistance (nicely) helps.

Government Mortgages to New Immigrants

The regulations for calculating the amount of a government mortgage that a new immigrant can receive are tricky:

• Olim are given points (according to family size and other factors below) like any other Israeli citizen who does not own or never owned an apartment.
• Army service is reckoned according to how many months one served. As such, since most olim only do a shortened service, this will not overly affect the mortgage.
• Single-parent families are given extra points.
• Handicapped olim are given extra points.
• There is something called Vetek for Olim which adds extra points.
• There are also 3 designated areas of the country, similar to the present areas of development towns.
• The amount of interest also depends on the amount of accrued points.

There are other factors which can affect the amount to which you are entitled. Your best bet is to go to a mortgage bank and let them do the calculations for you.

Beyond the assistance offered by the government to olim, one can get a supplemental mortgage from any mortgage bank. Because of the element of competition, the different mortgage banks offer various types of deals and mortgages. If you need to take out a large mortgage, it may pay to shop around. As far as the above assistance, all mortgage banks provide the same amount (as it comes from the government through them).

Organizing Your Mortgage (Mashkanta)

It must be emphasized from the outset that the following is generally what is required. Circumstances may necessitate other documents or special processes. There may be minor differences from bank to bank.

Apply to the mortgage bank of your choice for a "Teudat Zakaut" (eligibility certificate).

• Bring your Teudat Oleh, Teudat Zehut and those of your family.
• An Oleh married to an Israeli should also bring the marriage certificate and the Israeli partner's documents - including proof that he/she has done army service or has been exempted.

Once your Teudat Zakaut has been approved, (takes about 1 week and it's valid for 1 1/2 years), you should return to the bank with a purchase contract, as drawn up by a lawyer.

Check the following:

• If the apartment is built on state or privately owned land
• Where the apartment is registered, i.e. land registry, Israel Lands Authority, housing company.
• Any outstanding debts on the apartment.
• Which taxes and payments should be paid by the buyer and which by the seller.

You may now request the loan. Specify whether or not you want a "mashlima" (supplementary) mortgage. This involves filling out a number of forms.

The bank will give you forms for your lawyer to fill out as follows:

• Notarized Power of Attorney
• Lawyer's agreement to undertake transferral of the apartment from the sellers to the buyers
• Proof of registration at Minhal Karka Israel in the seller's name (if the apartment is second hand). If the apartment is new, bring a guarantee to this effect from the building company/contractor.

You will then have to send 3 guarantors (sometimes more) under 55 years of age to the bank with their Teudat Zehut and a copy of their salary slip. It is possible to obtain these forms from the bank - the guarantors may then sign at any bank on the form (the requirements are the same).

Once all these procedures have been completed to the bank's satisfaction, a check will be issued in favor of the seller of the apartment.

Things to Check / Remember

• If the sellers want to transfer their mortgage to another apartment or to pay it off in total, documentation may be required from the sellers' bank to this effect, since most banks will not allow two mortgages to be registered for the same apartment.

• Remember - if you buy through a realty agent, you usually have to pay them between one and two percent of the price of the apartment (sometimes negotiable).

• The lawyer's fee is usually between one half and one percent of the price of the apartment (sometimes negotiable).

• Apply for a permit (Ishur) from Misrad Hapnim in order to receive a discount on purchase tax (Max Rechisha).

• Check the size of the apartment, and be aware that the bank is likely to send an assessor to check the size.

Buying Land in Israel

93% of all land in Israel is government owned. This includes both lands of the government itself and the Keren Kayemet. They in turn have given the land to the Israel Lands Authority to manage.

In order to purchase a lot of land one has two directions. First through tenders which are released by the ILA. The second through contractors who have already purchased the land and subdivide it. Often these plots include what is known as Tashtit or infrastructure. This includes electricity, water and sewage up to the edge of your lot.

If you are purchasing within the city limits then your local city hall should have a list of available lots. Remember - if you buy an empty lot from an individual make sure that the land is zoned for building and not agriculture.

Over the "greenline" the situation is a bit different. Technically there is no problem in buying land from Arab owners though getting a building permit is virtually impossible especially today. Some entire neighborhoods were bought outright i.e. Karnei Shomron Bet.

In order to buy in a community village you must first go through the Absorption Committee (Vaad Klitah). This may entail different steps depending on the settlement. Once you have been approved as a candidate some may make you wait one year until you are a voted-in member. This in some ways is similar to types of Moshavim or Kibbutzim. On the whole, Yishuvim are a bit more liberal (whether in the Galil or Yesha) today than they were 10 years ago.

Now that you're ready to build, how do you choose a contractor? There is of course a list of "approved" contractors by the building association but they don't tell you if he is honest or anything else about him really. The best way is through friends who have used one and were satisfied. There is also a union of contractors ("igud hakablanim" telephone 03-560-6957) where every contractor who does work above a certain minimum must be registered.

The same applies for Architects - having a degree and being recognized doesn't mean you will like their work. Choose one who is willing to spend time with you and note your life style, not someone who sees this as a good chance to experiment with some dream of his and nightmare of yours.

Building as a group - on many Yishuvim and new developments people join together to use one contractor which can decrease the cost. No matter what, never give the whole cost of the house up front and be certain that he has Arevut Bankait (bank guarantees) on anything which you did give up front.

Lastly: age and religious beliefs - While there are restrictive regulations on kibbutzim and some Moshavin regarding age, this does not usually happen on a yishuv. The question is one of where would you feel comfortable.

As far as being observant goes, many community settlements have a homogenous religious leaning. There are others who believe that a mixed or open community is more positive both for its religious and secular elements. Lists of these communities are available at the settlement department of the World Zionist Organization as well as Amana (telephone 02-532-2225).

No matter where you buy, try to be sure that you have really checked out the place before putting down your life savings. Remember most Yishuvim have a membership fee as well.