Israel’s next major housing lottery has turned into something bigger than a real estate program. It is now a test of what the state rewards after years of war, those who left jobs, businesses, studies and families to serve.

The Israel Land Council has approved a split in the 11th “Dira BeHanacha” lottery, the government’s flagship discounted-housing program. Instead of launching one broad lottery for the entire eligible public, the first round will offer roughly 4,000 apartments to IDF reservists only, with about half of those reserved for combat reservists. A second round of roughly 3,000 to 4,000 additional apartments is expected to open later to the wider eligible public, once the state receives and processes the necessary IDF data.

For Israelis trying to buy their first home, “Dira BeHanacha” can be life-changing. Winners do not receive a free apartment. They receive the right to buy a new apartment in a participating project at a government-discounted price, often saving hundreds of thousands of shekels compared with the open market. In a country where young couples are squeezed by high prices, expensive mortgages and limited supply in central areas, that lottery ticket can become the difference between renting indefinitely and entering the ownership market.

The current round includes nearly 8,000 apartments across 19 cities and communities, including high-demand and strategic markets such as Ashdod, Rishon LeZion, Rehovot, Kfar Saba, Ma’ale Adumim, Kiryat Gat, Hadera, Nahariya, Eilat and others. Some of the largest allocations are outside Tel Aviv’s core, including Ma’ale Adumim, Kiryat Gat and Kfar Saba, showing how the state is using discounted housing not only as a welfare tool, but also as a way to shape where young Israeli families put down roots.

The mechanism is simple on paper and extremely competitive in practice. Eligible applicants first need a valid certificate of eligibility, then register through the official lottery system. They may generally register for up to three cities and for all participating projects in those cities. If they win, they wait for the project to advance, receive a summons from the developer, choose an apartment according to lottery order and sign a purchase contract. The catch is timing: many projects are still years away from delivery, and winners usually cannot sell the apartment freely for five years from Form 4 occupancy approval or seven years from the lottery win, whichever comes first.

The political earthquake behind this round is the High Court ruling on draft evaders. The court ordered the state to stop granting major financial benefits to Haredi yeshiva students who are legally required to serve but have not reported for military service. Housing was one of the most significant benefits on the table because the discount can be worth enormous sums. That ruling forced the government to rework the lottery rules, delaying the launch and pushing the state to create a screening process tied to military-service status.

The result is a rare housing policy shift with moral weight. For years, Israelis complained that “Dira BeHanacha” felt like a real estate lottery that rewarded luck more than contribution. This time, the state is explicitly moving reservists to the front of the line. Under the current rules, reservists who served at least 60 days under emergency call-up orders from October 7 onward are expected to receive priority, with combat reservists receiving an additional edge within the reservist allocation.

For the broader market, this will not solve Israel’s housing crisis. It will not suddenly make Tel Aviv affordable, and it will not erase the pressure of mortgage rates, construction costs or years of underbuilt supply in key areas. The Bank of Israel’s benchmark rate remains at 4%, while the latest CBS-linked housing data still shows a choppy market: monthly prices rose slightly after recent declines, but annual prices remain lower in several areas.

But for thousands of families, this round matters. It gives reservists a real financial advantage in a market where “thank you for your service” is usually cheaper than actual policy. And it sends a clear message: after a war that pulled entire households into national service, housing benefits are no longer just about income and luck. They are also about who showed up.