Buying your first home is one of the most important milestones in your personal and financial life. However, the main obstacle is often saving up the necessary funds to cover the down payment on the mortgage—which is typically 20% of the property’s price—in addition to the associated costs for taxes, notary fees, and registration.

With the aim of facilitating access to primary residences, the government has launched an ICO guarantee program with a budget of 2.5 billion euros. This measure is designed to help young people and financially stable families who, despite having a steady income, do not have the necessary savings to cover the initial cost of the purchase.

Thanks to this program, it is possible to access more financing than usual, up to 100% of the home’s value in certain cases. This helps lower the initial financial barrier and makes it easier for more people to buy their first home without having to wait years to save enough money.

In this article, we explain what ICO guarantees are, how they work, who can apply for them, what the updated requirements are for 2026, and how to take advantage of this assistance to buy your first home with greater financial security.

What Are ICO Guarantees?

ICO guarantees are a government guarantee offered by the Official Credit Institute that makes it easier to obtain mortgages on more favorable terms. Their purpose is to help homebuyers who have a stable income but have not been able to save enough to cover the down payment on a home.

With a traditional mortgage, financial institutions typically provide financing for up to 80% of the property’s value, which requires the buyer to contribute the remaining 20% from their own savings. On top of this amount, there are the costs associated with the purchase, which represent a considerable financial burden.

The ICO guarantee covers a portion of that percentage that the bank would not normally finance, thereby reducing the risk for the financial institution and making it easier to obtain a mortgage. This allows the buyer to secure financing on better terms and move into their primary residence sooner.

This measure is specifically aimed at first-time homebuyers—a group that typically has job stability but has not yet had enough time to save the necessary down payment.

Purpose of the ICO Guarantee Program

The main objective of the ICO guarantee program is to make home ownership more accessible to young people and families who, although they have the financial means to take on a mortgage, find it difficult to come up with the down payment.

In many cases, a monthly mortgage payment may be similar to rent, but the need to have savings set aside delays the decision to buy. With this measure, the government lowers the initial barrier and enables more people to purchase a primary residence under favorable terms.

In addition, the initiative helps boost household economic stability, promotes financial independence, and encourages long-term financial planning. It also promotes access to energy-efficient housing, as the guaranteed loan-to-value ratio may increase for properties with higher energy efficiency ratings.

In a context where access to housing is one of the main challenges for many young people and families, these types of measures aim to offer solutions that make it easier to buy a home without compromising future financial stability.

Who Can Apply for ICO Guarantees in 2026

The ICO guarantee program is primarily aimed at young people up to age 35 and families with dependent children who wish to purchase their first primary residence in Spain.

To be eligible for this assistance, applicants must meet a series of income and asset requirements that ensure the program is directed toward those who truly need support in accessing financing.

The main requirements include:

• have legal residence in Spain during the two years prior to the application
• Income must not exceed 37,800 euros gross per year per applicant (4.5 times the IPREM)
• If there are two buyers, the limit is calculated based on the sum of their combined income
• Net worth cannot exceed 100,000 euros

The income limit may be increased in certain family situations. For example, it increases by 2,520 euros for each child and includes an additional 70% increase for single-parent families. This adjustment allows the assistance to be tailored to different economic circumstances and facilitates access to housing for a greater number of households.

As a general rule, applicants may not own another home. However, exceptions apply when the previous property consists solely of an inherited share, when the property is no longer available following a separation or divorce, or when the home is inaccessible due to a disability.

Features of the ICO Guarantee

The ICO guarantee generally covers up to 20% of the mortgage loan amount. This percentage can reach 25% when the home has an energy efficiency rating of D or higher, which encourages the purchase of more efficient and sustainable homes.

Thanks to this support, buyers can access financing that exceeds the standard 80% offered by financial institutions, reducing the need to have substantial savings set aside in advance.

The purchased home must be used as the owner’s primary residence for a minimum period of 10 years, which coincides with the term of the guarantee. During this time, renting out the property is limited to exceptional circumstances, such as changes in employment or family circumstances.

The maximum price of a home depends on the limits set by each autonomous community. For example, the limit is 325,000 euros in the Community of Madrid and 300,000 euros in Catalonia, the Basque Country, and Navarre. These limits are intended to ensure that the measure applies to homes priced in line with the average market.

The deadline for taking out ICO-backed mortgages has been extended to December 31, 2027, allowing buyers to plan their purchase with more flexibility and take their time analyzing the options available on the market.

Step-by-Step Guide to Applying for an ICO Guarantee

Applications for the ICO guarantee are submitted through financial institutions participating in the program. The process begins with an assessment of the applicant’s financial situation, including income, job stability, and ability to repay.

If the applicant meets the established requirements, the bank processes the guarantee application along with the mortgage. Once approved, the buyer can secure a larger loan and finalize the purchase of the home.

To make the process easier, it is advisable to prepare the necessary documentation in advance, which typically includes proof of income, an employment contract, information about your housing situation, and details regarding your financial situation.

Comparing different financial institutions can be helpful, since each bank may offer specific terms depending on the buyer’s profile and the type of property.

Benefits of ICO Guarantees for First-Time Homebuyers

ICO guarantees offer significant advantages for those who want to buy their first home without needing to have substantial savings.

The main benefits include:

• make it easier to access financing with fewer savings
• allow for higher funding percentages
• reduce the initial financial barrier to purchase
• promote long-term housing stability
• promote more mindful financial planning

In addition, requiring buyers to meet certain financial criteria helps them analyze their financial situation more realistically, assess their ability to pay, and plan for the future with greater confidence.

The ability to access more financing also broadens the range of housing options available, making it easier to find a home that best suits personal or family needs.

Practical Example of an ICO Guarantee

Let’s imagine the case of a young person who wants to buy their first home for 220,000 euros. Although they have a stable income, they do not have the savings needed to cover the 20% down payment on the property.

Thanks to the ICO guarantee, the bank can provide financing that exceeds the usual percentage, making it possible to buy a home without having to wait several years to save up enough money.

For families with children, the increase in the income limit makes it even easier to qualify for the guarantee, tailoring the assistance to different personal and financial situations.

These examples show how the ICO guarantee can help lower the barrier to homeownership and facilitate long-term financial planning.

Expenses Associated with Buying a Home

Although the ICO guarantee makes it easier to secure a mortgage, it is important to keep in mind that buying a home involves other additional costs.

Among the most common expenses are taxes related to the sale, notary fees, land registry fees, property appraisal costs, and administrative fees.

Overall, these costs typically range from 8% to 12% of the home’s price, so it’s a good idea to factor them into your financial planning before beginning the home-buying process.

Taking these expenses into account will help you avoid unexpected costs and ensure a more sound and realistic financial decision.

Tips for Getting the Most Out of the ICO Guarantee

To take full advantage of the ICO guarantee, it is advisable to carefully assess your ability to make monthly payments and anticipate possible changes in your future financial situation.

Choosing an energy-efficient home can be particularly appealing, as it allows you to qualify for a higher loan-to-value ratio and reduce your energy consumption in the long term.

It is also advisable to compare different financing options and assess your job stability before taking out a mortgage. Good planning will ensure that buying a home is a sustainable and appropriate long-term decision.

Conclusion

ICO guarantees have become a key tool for facilitating access to a first home in Spain. Thanks to this measure, many people are able to overcome the hurdle of the down payment and secure financing on better terms.

Understanding the requirements, assessing your ability to pay, and planning your purchase carefully will allow you to make the most of this opportunity and make a more sound financial decision.

If you’d like more information on how to finance your home efficiently, you can check out Culmia’s guide: Guide to Financing Your New Home – Culmia