Funding for Tama 38: All the options available to you

Funding for Tama 38: All the options available to you

Tama 38 has become one of the most popular programs for strengthening old buildings and adding new housing units in Israel. However, one of the biggest challenges that homeowners and contractors face is financing the project. In this article, we will review the various options for financing Tama 38 projects and examine the advantages and disadvantages of each one.

Self-funding is one of the most common options for financing Tama 38 projects. In this model, homeowners finance the project out of their own pockets, using their savings or personal loans. The main advantage of self-funding is complete control over the project and division of profits. However, not all homeowners have the necessary financial resources to invest in this type of project, making it a viable option only for a few.

Many banks in Israel offer loans specifically for financing Tama 38 projects. These loans are typically granted for a period of up to 30 years, with favorable interest and repayment terms. The main advantage of bank financing is its accessibility to most homeowners, without the need for a large upfront investment. However, the loan approval process can be lengthy and cumbersome, and banks may require significant collateral and guarantees.

In recent years, many non-bank financing entities have entered the Tama 38 financing market, offering more flexible solutions for homeowners and contractors. These entities, such as investment funds and financing companies, provide short and medium-term loans, often with more flexible repayment terms than traditional banks. The main advantage of non-bank financing is its speed and accessibility. However, interest rates on these loans may be higher than bank financing.

Another model for financing Tama 38 is the establishment of a purchase group of homeowners. In this model, a group of homeowners band together to carry out the project, sharing costs and profits among themselves. Purchase groups can benefit from improved bargaining power with contractors and suppliers, as well as a more equitable distribution of expenses. However, establishing and managing a purchase group can be challenging and requires a high level of cooperation and coordination among members.

In some cases, the developer or contractor executing the Tama 38 project may propose to finance the project themselves, in exchange for a portion of the additional apartments or future profits. This model may be attractive to homeowners who do not have the necessary financial resources or are not interested in assuming the financial risk associated with the project. However, it is important to ensure that the financing agreement is detailed and balanced, and that the interests of all parties are adequately protected.

Financing a Tama 38 project can be a significant challenge, but there are various financing options available to homeowners and contractors. Whether choosing self-funding, bank financing, non-bank financing, a purchase group, or financing by the developer, it is important to carefully examine the advantages and disadvantages of each option and choose the financing model that best suits the specific needs and circumstances of the project. With the right preparation and appropriate advice, it is possible to ensure that the Tama 38 project receives the necessary funding for its success.