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State Aid

State aid: Changes to the Icelandic Housing Financing Fund accepted



Following recommendations by the EFTA Surveillance Authority, Iceland has committed to change the rules governing the Icelandic Housing Financing Fund (HFF). Therefore, the Authority decided today to close its investigation.

“The Authority welcomes that Iceland has implemented important changes to the functioning of HFF in order to ensure that its activities are compatible with the State aid rules of the EEA Agreement.” said Ms. Oda Helen Sletnes, president of the Authority.

Following the measures adopted by Iceland, HFF's activities will be limited by certain conditions. In particular, the introduction of a maximum allowed loan amount and a minimum loan-to-value ratio for the general residential loan scheme results in a maximum value cap for dwellings to be financed of ISK 40 million, above which dwellings are no longer eligible for HFF loans. These limitations are subject to a yearly review. Social requirements have also been introduced for rental companies to be eligible for HFF loans.

The Authority further welcomes the decision by the Icelandic authorities that HFF will not engage in any economic activities other than those entrusted to it as services of general economic interest. Moreover, the Icelandic authorities have confirmed that HFF does not discriminate against citizens from other EEA States.

Having accepted the proposed measures, the Icelandic authorities are legally bound to implement the changes to the rules governing HFF in full.

Parallel to today's decision, the Authority also closed its investigation into the recapitalisation of HFF, which had been temporarily approved to avoid a serious disturbance in HFF´s operations and the economy of Iceland. The Icelandic authorities have demonstrated that the capital injection was covered by the existing aid scheme. Accordingly, there was no need to notify the measure. The Icelandic authorities have therefore withdrawn the notification of 15 February 2011. On this basis the case will now be closed.

A non-confidential version of today's decision will be published in the register of state aid decisions on the Authority's website, normally within a month.


Relevant documents:


For further information, please contact:

Mr. Andreas Kjeldsberg Pihl
Press & Information Officer
tel. (+32)(0)2 286 18 66
mob. (+32)(0)492 900 187


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