HCSF flexibility quota (derogation allowance)
A 20% allowance on quarterly mortgage production volumes granted by the HCSF to banks to deviate from standard criteria (debt ratio above 35% or term above 25 years). At least 80% of this allowance must finance primary-residence acquisitions, of which at least 30% must go to first-time buyers. The remaining 20% is unrestricted. The broker argues for their file to be approved within this derogation allowance.
Key points
- Authorises derogations to the 35% debt ratio or the 25-year maximum term.
- At least 80% of the allowance must finance primary-residence acquisitions.
- At least 30% of primary-residence derogations must go to first-time buyers.
- The broker argues for their file to be accepted within this flexibility margin.
Frequently asked questions
How does a broker know whether the bank still has derogation capacity during the quarter?
Banks do not publish their derogation allowance consumption in real time. The broker assesses it indirectly through feedback from their branch or back-office contacts: if derogatory approvals become scarcer towards the end of the quarter, this is often a sign that the allowance is nearly exhausted. This is why submitting a borderline file at the start of a quarter is generally more favourable.
Which types of files have the best chance of obtaining a derogation within this allowance?
Files with a debt ratio slightly above 35% but an otherwise strong profile (permanent contract, substantial down payment, high residual savings, no incidents), and especially primary-residence acquisitions by first-time buyers, benefit from regulatory priority. The broker highlights these strengths in the summary note to guide the decision.
What happens if a bank exceeds its derogation allowance in a given quarter?
The HCSF monitors compliance with the allowance through banks' quarterly reporting. An occasional overshoot may result in a warning, and repeated overruns expose the institution to corrective measures. In practice, banks self-discipline by tightening their derogation criteria as they approach the threshold, before being compelled to do so.
In practice
A first-time-buyer couple with a 37% debt ratio presents a 20% down payment and residual savings of €15,000; the broker submits the file at the start of the quarter with a detailed summary note, and the bank grants the derogation within its first-time-buyer allowance.
Official sources
- High Council for Financial Stability (HCSF) · Ministère de l'Économie
- Article L519-1 of the Monetary and Financial Code · Légifrance
- Prudential supervision and resolution authority · ACPR (Banque de France)