Is it possible to pay off my husband’s mortgage with maternity capital?

Maternity capital (MCC) is a measure of state support for families with children. When a child is born, the family has the right to receive a certificate for maternity capital. The subsidy can be used for several purposes. Most often, maternity capital money is used to pay off a mortgage or as a required down payment when taking out a housing loan. A certificate is a document that is issued to a specific owner. Most often, it is issued by the child’s mother, and accordingly it is issued in her name. Sometimes they plan to take out a housing loan in the name of a spouse. In this case, it is important to know whether the husband can take out a mortgage and use maternity capital funds.

What happens to the property if the mortgage is issued to a spouse?

The status of the property depends on the time of registration of the mortgage:

• The loan was issued by the husband before the marriage was registered. Such real estate is considered the full property of the spouse. He is both a full borrower and the sole owner of the property.
• The mortgage was taken out during marriage. In this situation, it does not matter which spouse is the main borrower and which is the co-borrower - they have the same rights. All jointly acquired property and debt obligations are divided in half. The only exception is the presence of a marriage contract, which states how the division of property occurs.
• In the event that the mortgage loan was taken out in a “civil marriage” (cohabitation), that is, the relationship between the partners was not registered, each person will have their own property and debts. The cohabitant has no right to claim them.

Mortgage if the spouse’s credit history is damaged

Sberbank's credit policy is significantly tightened during periods of economic crises. The financial institution issues mortgage loans to new clients extremely reluctantly. Problems in the economy are causing mass unemployment and falling living standards. Many borrowers stop making mortgage payments.

Is it possible to get a mortgage from Sberbank with a bad credit history?

No one can interfere with this will of the house. If, according to the corresponding agreement, you agree to your shares, then in this apartment you can conclude that you will have to move into this apartment and not privatize it. Demand to participate in privatization in court, from a notary, and then a power of attorney will be passed.

May 14, 2021 vektorurist 107

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To whom is maternity capital issued?

Only the mother who gave birth (adopted) the child can issue such a document. To do this, she needs to write a corresponding application at the Pension Fund office at her place of registration. Of course, exceptions are taken into account:

• The child’s mother has died or been declared dead by the court;
• A decision has been made against the mother to deprive her of parental rights;
• The father adopted the child alone.

In these cases, the father or legal guardian must prepare a set of required documents and contact the Pension Fund of the Russian Federation.

Repaying a mortgage loan using matkapital

The MSK certificate is registered in the name of the mother, but the government allocates funds for all members of the family in which the child appears. According to the law, allocated public funds can be used to improve living conditions without waiting for the child to be three years old.

A mortgage loan is a long-term targeted loan that is issued for the construction or purchase of finished residential property. This means that you can pay off your mortgage using an MK certificate.

If the home was purchased during marriage, this case is the simplest. The Pension Fund of the Russian Federation approves such transactions, even if there is only one borrower in the loan agreement. A prerequisite in this option is the obligation of the spouse to allocate shares in the mortgaged property to all children under 18 years of age within the next 6 months after using the certificate.

If the spouse took out a loan before marriage, in this situation he also has the right to use maternity capital. If the family is registered when contributing capital, then the Pension Fund allows the mortgage to be repaid in this way.

Important! The allocation of shares to minors is a mandatory condition when using maternity capital funds.

The husband may not be listed as the father on the birth certificate. Also, he may not be a blood relative of the child. The main condition here is whether the marriage is officially registered and whether the mother agrees. If the relationship is legalized, then the Pension Fund of the Russian Federation will also approve the application for the order, but will request that the applicant’s spouse allocate parts of the living space to each child.

Important registration conditions:

• If a housing loan was taken out by a spouse before marriage, then he allocates shares only to children - the wife cannot apply for housing.
• A refinanced mortgage loan can also be covered with maternal capital funds.
• If parents are deprived of parental rights, then all MSC funds are transferred to the children in equal parts. They can be disposed of by official guardians.

If the mortgage was taken out before marriage

If the mortgage was taken out by the husband before marriage, then maternity capital can be used to repay the loan while already married.
In this case, both children of a spouse can be from the first husband - it doesn’t matter. It is only necessary that the marriage be officially registered. Important point

— in this case, maternity capital can be used to pay off the mortgage if the spouse, who is the owner of the living space, notarizes the obligation to provide the children with their share in the apartment.
After the encumbrances on the immovable property are removed, he will have to fulfill the obligations. In case of violation, administrative or criminal liability will occur. As for the wife, she is not mentioned in any way in the law. This means that the husband is obliged to allocate part of the housing only to the children, and not to his ex-wife. That is, maternity capital, fully used to pay the mortgage, cannot be a valid basis for recognizing the spouse as the owner of part of the apartment.

What documents are required for registration?

Maternity capital funds can be used not only to pay off a mortgage issued to the owner of the certificate, but also to a housing loan taken out by the legal spouse.

To consider an application for disposal of maternal capital in order to pay off the husband’s mortgage, you will need to collect the following set of documents:

• Identity card (Russian passport);
• A copy of the co-borrower’s passport, if any;
• Loan agreement;
• MSK Certificate;
• An extract from the bank on the amount of the principal balance and interest under the agreement;
• Certificate from Rosreestr EGRN;
• A notarized power of attorney regarding the obligation to allocate parts of residential real estate to children within the maximum established period (6 months);
• A document confirming the registration of marriage with a citizen who is the main borrower;
• Birth certificates of children;
• A copy of the husband's passport.

Maternity capital and civil marriage

In order to pay off the husband’s mortgage with maternity capital, it is necessary that the marriage be officially registered. If the marriage is civil, then it will not be possible to pay off his debt. With MK funds, a wife can only pay off her own mortgage, if it was previously taken out.

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The same situation applies to a divorced couple. For example, they decided to pay off the balance of payments with a certificate and divide the apartment in half. However, the Pension Fund will not give permission for the operation - divorced people are not considered a family, therefore, it will not be possible to pay the spouse’s debt.

It’s another matter if the mortgage was taken out jointly during marriage, and even after the divorce, the former spouses continue to jointly pay the common debt. In this case, it will be possible to pay off the husband’s debt.

Mortgage repayment

The state benefit cannot be cashed out; it can be used for several purposes:

• contribute as payment for the education of children;
• be included in the funded part of the mother’s pension;
• spend on vital goods for a disabled child (for example, means for rehabilitation, medical devices, etc.);
• spend on solving the housing problem.

In the latter case, maternity capital can be used to repay the bulk of the mortgage debt, pay interest on the loan, or contribute MSC funds as a down payment when applying for a housing loan.

If the mortgage has already been issued and the main borrower is the husband, then to close the debt with maternal capital you need to follow the following instructions:

1. It is necessary to visit the credit institution and notify the credit manager that you plan to deposit maternity capital funds.
2. Receive a certified certificate from the bank regarding the balance of the debt.
3. Collect certificates, extracts, copies and originals of documents necessary for the Pension Fund.
4. Come to the Pension Fund to submit documents and write an application.
5. Wait for the decision of the fund commission (usually this takes about a month).
6. If the decision is positive, the Pension Fund will transfer the money to the bank's current account within 10 days.
7. If the MSK funds are sufficient to fully repay the mortgage, then you need to pick up a mortgage closure certificate from the bank. If the loan is not fully repaid, then you should discuss with the lender whether you are changing the amount of payments or reducing the loan period. This clause is often specified in the loan agreement.
8. Request and sign an updated payment schedule.
9. Over the next six months, allocate shares in the apartment (house) for all family members.

Is it possible to pay off a military mortgage with maternity capital?

Most military personnel at the time of purchasing housing with a military mortgage are already family people raising one, and often two children. Of course, when a second child appears, the spouses automatically receive the right to additional assistance from the state, and here the question arises - how can maternity capital and a military mortgage be used simultaneously, and with the possibility of obtaining maximum benefit? In other words, is it permissible to repay a housing loan early from maternal capital funds?

Here you should rely on the following points of both state programs:

1. When repaying a home loan, military personnel are not required to report the source of their financing. In other words, it does not matter to the bank where the funds for mortgage payments come from. In this case, early repayment of the entire amount or part of it is allowed.
2. Purchasing residential real estate on credit is possible using maternity capital finance.
3. Matkapital can be used to pay off an existing mortgage loan (regardless of the type of mortgage agreement), pay off part of it, or make a down payment. In this case, you don’t even need to wait until the second child reaches 3 years of age.

It is also important to remember that the purchase of residential premises under a military mortgage presupposes the subsequent registration of ownership of the apartment in the name of a participant in the state program. While improving living conditions when using maternity capital requires dividing the acquired real estate between all family members in equal shares.

In this case, existing and all subsequent children are taken into account.

This was the main controversial point that emerged earlier when questioning the joint use of two state support programs. But in May 2021, Resolution No. 627 of the Government of the Russian Federation came into force, with adjustments to the rules for issuing housing loans to NIS participants.

The innovations state that a serviceman, using maternity capital funds to repay a loan, part of it, or pay the down payment, undertakes to register ownership of the premises within six months after the removal of encumbrances on the property, taking into account all family members. Accordingly, now there are no restrictions in this matter.

Reasons for refusal

There are the following reasons for the Pension Fund’s refusal to dispose of maternity capital funds:

• Errors in the application or in the documents provided. It is worth carefully checking that the application is filled out correctly; all copies must be certified.
• Incomplete set of papers. Before submitting documents, check the exact list of required documents, how many copies you need to provide, etc.
• Providing incorrect information. All documents undergo a thorough check, and inconsistencies will be detected.
• The mother and/or child does not have Russian citizenship. According to Federal Law No. 256, both the owner of the certificate and the child must be citizens of the Russian Federation.
• Maternity capital has been spent. If an application for disposal of the full available amount has already been submitted and it has been approved, then the Pension Fund Commission will see a zero balance in the applicant’s MSC.
• Deprivation of parental rights. This sanction automatically deprives you of the right to use the certificate.
• The couple's relationship is not officially registered. According to the law, it is possible to pay off a husband’s mortgage with maternity capital only after the official registration of the marriage and confirmation of this fact with a marriage certificate
• The purchased property does not meet the requirements of the Pension Fund. If the allocated mortgage money was used to purchase emergency housing, apartments, housing that does not meet standards, etc., then the fund will not approve the repayment of such a loan with funds from maternal capital. It is also worth considering that if a housing loan was taken out to purchase a private house (country cottage) with a plot of land, then the agreement must stipulate what part of the funds was spent on the purchase of land and what part on the purchase of a house. The Pension Fund takes into account only residential premises.
• The residential property was purchased from a relative. The pension fund often regards such sales transactions as being made for the purpose of cashing out government subsidies.
• The husband's loan is consumer, not targeted. If a spouse took out a loan and spent the money on buying an apartment, it is quite problematic to prove this. The Pension Fund will not find out where the money was deposited, but will simply cancel the application.
• The applicant’s husband refuses to allocate shares or has not provided a notarized undertaking to do so. This condition is mandatory; failure to comply will result in the suspension of consideration of the application for disposal.

Important! If the applicant disagrees with the decision of the Pension Fund, he has every right to appeal to higher authorities and appeal the decision of the Pension Fund in court.

The managing partner at the Zagorodny Stil real estate agency, Petr Manko, answers:

Recently, several times I have had to sell and buy apartments that were previously purchased using maternity capital funds. One of the typical mistakes of owners is allocating an excessive share to children and spouses and, as a result, inconvenience in subsequent purchase and sale transactions with this property or erosion of shares in the ownership structure of the property. In this situation, it is important not to make such a mistake.

In the above example, after repaying the mortgage loan, all family members should become owners of shares in the ownership of the apartment, but not ¼ of the share. And this is the key point. The share of the wife and children should be calculated on the basis of ¼ share of X, where X is the share of the apartment purchased with maternity capital. This norm is reflected in the review of the Judicial practice of the Supreme Court of the Russian Federation. In practice, a different situation most often occurs when the share of maternal capital in the purchase price is a ridiculous 5–10%, and the share of children in the ownership of this apartment is 50%.

Marriage, divorce and your real estate

Division of property in divorce: complex cases

Special requirements

To close a husband’s mortgage with maternity capital, the following conditions must be met:

• All documents related to the transaction (purchase and sale agreement, loan agreement, etc.) are officially completed and have legal force;
• The mortgaged housing is located on the territory of the Russian Federation.
• The apartment (house) is suitable for living at any time of the year;
• The living space per family member is 18 square meters. m. or more;
• The property is in good condition and meets safety requirements;
• The housing is connected to all necessary communications (water supply, electricity, sewerage, heating, etc.).

What happens during a divorce

Unfortunately, no family is immune from a possible breakdown in relationships. During a divorce, all property that was acquired during marriage is divided between the spouses (unless a marriage contract has been drawn up in this case). It is important to know how residential real estate for the purchase of which MK was used will be divided.

Housing acquired during marriage is divided among all family members, including children. Only the parent with whom the children remain after the divorce is entitled to the children's shares. This right ceases to apply when the child reaches 18 years of age.

If the apartment (house) was purchased before the marriage, then only children have the right to part of this property. If the court decides that the children remain with the mother, then she has the right to live in the living space allocated to the children until they come of age.

The ex-wife can receive half of the amount paid to repay the mortgage for the entire duration of the official marriage.

How is an apartment divided if there is a divorce?

Perhaps the husband spent all his maternity capital to pay off the mortgage, after which he divorced his wife.
If the apartment is registered in the name of a spouse, then the ex-wife will not be able to claim it. However, if she has nowhere else to live, then, according to the law, the woman retains the right to live in this living space. After the spouses divorce, the following will happen:

1. The sole owner of the apartment remains the spouse, who undertakes to allocate their share to the children after the mortgage is repaid.
2. The wife retains the right to live in the apartment - as a rule, no longer than one year. If there is a court decision that the children must live with their mother until they reach adulthood.
3. The amount of payments paid on a housing loan for the period of cohabitation in marriage, including maternity capital funds, will be calculated.
4. The amount received will be divided into two equal parts - the husband must pay one part to his ex-wife. It is believed that all mortgage payments are the spouses' investment in jointly acquired property. That is, half of the amount is compensated to the wife who loses her home.

The bottom line is this: you can use maternity capital to pay off your spouse’s mortgage. But it is worth remembering that the husband and wife in this case have certain obligations to each other. If over time the spouses divorce, then the maternity capital paid for the housing loan will lead to legal proceedings.

Recommendations for design

It is important to adhere to these recommendations:

• Before contributing maternity capital to your husband’s mortgage, carefully study and assess the risks.
• Conclude a prenuptial agreement in which you spell out all the obligations of the spouses regarding debts and property.
• Before the power of attorney regarding the shares assigned to the children is certified and given to the Pension Fund, evaluate their volume - after signing this document, it will be impossible to change it unilaterally.
• In case of divorce, try to agree on a peaceful division of property by agreement of the parties.
• It is also worth keeping in mind that an application for an MK order that has been submitted and already reviewed by the Pension Fund cannot be withdrawn.

You can close your husband’s debt on a housing loan using the MSK certificate issued to the spouse. The main thing is to take into account the specifics of this procedure and not neglect the requirements of the legislation of the Russian Federation.