Regulatory Alerts2025-06-26
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FMA Circular on Sound Private Residential Real Estate Lending
The Austrian Financial Market Authority issued this circular to establish supervisory expectations for private residential real estate lending following the expiry of the KIM-V regulation. It requires credit institutions to adhere to specific underwriting criteria, including a maximum debt service-to-income ratio of 40%, a loan-to-collateral ratio not exceeding 90%, and a maximum term of 35 years. Institutions must ensure that deviations from these standards are internally defined, quantitatively limited, and monitored, with aggregate exceptions capped at 20% of new lending per quarter.
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