Maternity capital without waiting 3 years

On January 1, 2007, a new measure of social support for families raising children came into effect in Russia. This program is called maternity capital. Funds allocated by the state can be spent only for those purposes established by law. One of them is improving living conditions. Using family capital, you can buy ready-made housing, build your own home, or use the money to take out a mortgage loan. Transactions with maternal capital, but without a mortgage, have a number of features and difficulties. The most important thing is not to break the law, so that the use of certificate funds does not look like illegal cash withdrawal. Let's look at how maternity capital can be used to buy an apartment without a mortgage.

Legislative norms

Matkapital was created to improve the demographic situation in the country. The program started in 2007, and currently it is planned to extend it until 2022. As of 2021, maternity capital is 466,000 rubles. Everything related to this social support measure is specified in Federal Law No. 256.

Each region of the Russian Federation has its own legislative acts that adjust the procedure for receiving and using this money. Depending on the characteristics of the region, local legislative acts introduced additional opportunities for the use of maternal capital funds.

At the federal level, there are only three ways to spend these funds:

• Improving living conditions - buying a home or building it. Using maternal capital funds, you can buy an apartment, a private residential building, a plot of land for building a house, a room in an apartment or a share in a residential building. Of course, the most popular option is the purchase of finished housing, apartments and residential buildings.
• Payment for children's education.
• Topping up your mother's retirement account.

Important! Many Russians mistakenly think that maternity capital funds can only be used in mortgage transactions. This is absolutely false. State subsidies in the form of family capital can be used in any real estate transactions.

Features of transactions with maternity capital

At the legislative level, rules have been established for the use of funds from this social support measure when purchasing a home:

• The purchased object must strictly comply with existing sanitary and social standards, as well as all existing technical requirements. Thus, funds from maternal capital cannot be used to buy an apartment or house that is in disrepair, dilapidated condition, as well as objects with unsanitary conditions or illegal redevelopment.
• When purchasing a new apartment or house using family capital, there must be an obvious improvement in living conditions compared to where the family lived previously. This applies to the size of the new home, its quality, and location.
• New housing must have all the necessary communications for a normal life: heating, lighting, water supply, sewerage. All these systems must be operational and comply with standards.
• Housing must have its own kitchen, bathroom, windows, and doors. If there is a discrepancy on at least one point, the Pension Fund must prevent the purchase of such housing.

Using maternity capital to purchase housing for up to 3 years

It is possible to spend state support funds in the second of these areas if special goods or services are purchased to help a disabled child with social adaptation and integration into society. The new direction also makes it possible to improve the living space - this could be the installation of a ramp or lift, or other measures to improve the living conditions of a disabled child.

The option of repaying an existing mortgage is in practice more feasible, and many banks widely use it in their work. In this case, the important point is that the maternity capital will first go towards the interest accrued in the current month, and the remaining amount will go towards repaying the principal debt.

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Buying a home without a mortgage

This purchase option is suitable for families who have sufficient savings. By summing up the accumulated funds and maternity capital money, the family purchases the housing they like. This is especially true in rural areas, where the cost of housing is much lower than in big cities. In a village, it is quite possible to purchase housing entirely using maternal capital. The legislation does not create obstacles to such transactions.

If housing is purchased entirely with money from this social support, then the seller simply receives the funds to his account in a non-cash form. This is preceded by the conclusion of a purchase and sale agreement, which indicates the method of transferring money.

The Pension Fund is responsible for transferring money to the seller; this may take about 1-2 months. During this period, the Pension Fund must check the compliance of the acquired object. The transaction is possible when the Pension Fund has no claims to the purchased housing.

Important! The law sets a period when a family can use maternity capital. The child must be 3 years old. All other attempts to use the certificate are not permitted by the Pension Fund and are illegal.

Is it possible to get maternity capital for up to 3 years to buy a home without a mortgage and how to do it

Only those credit consumer cooperatives that are listed in the register of the Central Bank of the Russian Federation, have existed on the market for more than three years and have membership in a self-regulatory organization are allowed to work with government subsidies (Federal Law of December 2, 1990 “On Banks and Banking Activities” No. 395- 1). The interest rate in such institutions is usually higher than in banks. Taking out a loan from such financial institutions is advisable if the borrower has a larger share of funds in his hands.

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In order to purchase real estate using family capital without using mortgage funds and reaching the age of 3, you must use any of the methods presented below (we also talked about how to purchase housing using maternal capital without waiting for your child to reach 3 years of age in a separate article). So how can you buy an apartment without a mortgage using capital?

Refusal of the Pension Fund to transfer funds

The responsibilities of the Pension Fund include monitoring the use of maternal capital funds. Each specific case is carefully considered by PFR specialists, and the property itself is studied. Based on the results of this work, the applicant may be refused the transfer of maternity capital money for the purchase of housing. This happens in the following cases:

• If the property does not comply with existing standards and cannot be considered an option for improving housing conditions. It should be added here that housing requirements in cities and villages may differ.
• If you intend to purchase real estate from your immediate family. Despite the fact that the law provides for the possibility of purchasing housing from relatives, there is a circle of people with whom a transaction is impossible when it comes to using maternity capital funds. Such relatives include the mother/father, brothers/sisters, and grandparents of the certificate holder. All such cases are regarded as illegal cashing out of maternity capital.
• If in the selected object it is impossible to allocate shares for each family member. According to the law, each family member must have a share in housing purchased using maternal capital. This does not mean that each family member receives 1/4 of the share (if there are 4 people in the family). According to the law, children receive their share only from maternity capital funds. The remaining money (the family's own funds) is considered jointly acquired property of the spouses and, therefore, is divided in half between them. It turns out that each family member has a share, but for parents and children these shares are completely different. For convenience and clarity, the allocated portion of each family member is indicated as a fraction.
• If the property is located outside the Russian Federation.
• If Pension Fund employees detect an attempt to illegally cash out funds from maternity capital.
• If the applicant tried to use a certificate issued to another person.

Purchase under a sales contract

When purchasing real estate, maternity capital funds can be used, even if a mortgage is not required. It is the buyer's responsibility to notify the seller of his intentions in advance. You need to download information that maternal capital funds will be used.

Due to the length of time it takes to process an application to the Pension Fund (1-2 months), not every seller agrees to such transactions. But if the buyer has already secured the consent of the seller, all that remains is to choose the form of the purchase and sale agreement. There can be two of them:

• Contract with deferment. In this case, the deposit is transferred to the seller; its amount is all the money minus maternity capital. After the Pension Fund approves the application, the remaining funds will also be transferred to the seller’s account.
• Installment agreement. The buyer gives a small amount to the seller as a down payment, and the rest is divided into parts and paid in accordance with the agreement.

How to cash out before your 3rd birthday?

According to Federal Law No. 256, maternity capital (hereinafter referred to as MK) can be spent when the child reaches 3 years of age. But there are several exceptions to this law.

Firstly, MK is allowed to be used immediately after receiving the certificate when applying for a targeted loan, mortgage or loan, namely:

1. Partial repayment of an existing loan.
2. Using MK in the form of a down payment when receiving loan funds.

The loan is allowed to be used for expenses such as:

• home construction;
• purchase of secondary real estate;
• participation in shared construction;
• reconstruction of existing real estate.

After receiving loan funds, the citizen must contact the Pension Fund (PFR) to transfer the MK to a bank account.

The owner of the microcompany must submit to the Pension Fund the following documentation:

• Certificate of loan debt.
• Passport details.
• Birth certificate.
• Loan agreement.
• Certificate in MK.
• Checks, receipts that confirm that the funds were used for construction, reconstruction and other legal purposes.
• Documents confirming the registration of rights to real estate.
• Notarial obligation - according to this document, the owner of the apartment complex is obliged to divide the acquired property between the entire family (children and parents).
• Act on family composition.
• Other documents at the request of Pension Fund employees.

It is important to know!
Allocation of shares based on matcap. The period for reviewing documentation is 30 days. After a positive decision is made, the MK is sent to the specified account within 2 weeks.

Secondly, MK is allowed to spend until the child’s 3rd birthday on such needs as:

• purchasing goods for disabled children that help with social adaptation;
• receiving a one-time payment from MK (not provided for in 2021).

The process of buying a home without a mortgage

The transaction takes place according to the following algorithm:

1. Both parties to the transaction come to draw up a purchase and sale agreement (one of the above contract options is selected). Here the seller must receive a deposit (document this with a pledge agreement) or a down payment.
2. Documents are submitted for registration to Rosreestr. In this body, all terms of the transaction are checked, the buyer receives a certificate of registration of ownership. After this, a pledge agreement is drawn up. The property will remain pledged to the seller until it is fully paid off. Only after this the buyer becomes the full owner of the purchased property.
3. After this, the buyer must submit an application to the Pension Fund. The person for whom the certificate is issued must apply. It must have with itself a passport of a citizen of the Russian Federation, a spouse’s passport and a marriage certificate, an extract from the Unified State Register of Real Estate (USRRN) (that the right of ownership has been recorded). You also need a purchase and sale agreement, an obligation to allocate a share to each family member (to be drawn up and certified by a notary). You must first obtain from the Pension Fund a certificate of the unspent balance of maternity capital. This certificate is also attached to the package of documents. It takes up to 2 months for the Pension Fund to review applications for the use of maternity capital funds. After approval, the money is transferred to the account of the real estate seller. After approval by the Pension Fund, the money will be credited to the seller’s account within 10 days.
4. Only when the debt to the seller is considered repaid, the buyer must contact Rosreestr to remove the mortgage on the purchased property. To do this, a transfer and acceptance certificate is drawn up between the seller and the buyer, it confirms the full settlement with the seller.

How to buy a home in installments without a mortgage

Now we’ll tell you whether it’s possible to use maternity capital without a mortgage to rent housing with an installment plan. It will be possible to acquire real estate in this way if the current owner agrees to wait for a deferred payment. The owner must be notified in advance, and the terms of repayment of the debt must be specified in the contract.

The agreement between the owner and the buyer, when he uses maternity capital without a mortgage or loan, is of 2 types:

• with deferment of the balance, when the seller receives a deposit and the amount of capital is transferred within the period established by the contract;
• with monthly installments, when the seller receives the principal amount, and the buyer pays off the balance over a long period in equal payments.

In order for the agreement to pass verification, the text must indicate that payment for the balance and part of the living space is made through government subsidies. The agreement lists the period for submitting an application to the Pension Fund, the amount of the initial payment, the monthly contribution and specific dates for regular payments.

Template of Sale and Purchase Agreement with maternity capital without mortgage

To justify the use of maternity capital without a mortgage, documents are registered in stages:

1. The parties sign an agreement to purchase an apartment with maternal capital without a mortgage, after which the buyer completes the transaction or gives a deposit for the apartment.
2. The new home owner goes to the regional office of Rosreestr, where he registers ownership. When re-registration is carried out, the seller is present, who places an encumbrance in his name until the debt is completely closed.
3. The buyer takes documents from Rosreestr to the Pension Fund, where he writes an application for the transfer of state subsidies. (Statement on the order of MSC)

4. In order for the maternity capital to pay for an apartment without a mortgage, the PF representative checks the package of real estate papers, looks for errors and inaccuracies, and identifies the identity of the recipient of the certificate using the passport. The full list of documents is determined by Order of the Ministry of Labor of Russia dated August 2, 2017 N 606n “On approval of the Rules for filing an application for the disposal of funds (part of the funds) of maternal (family) capital and the list of documents necessary to exercise the right to dispose of funds of maternal (family) capital.”
5. When the paperwork is in order and the specialist has approved non-cash payment, funds from the Pension Fund are transferred to the bank account of the former owner. He writes a receipt, indicates the amount of money received, renounces the claims and removes the encumbrance in Rosreestr.

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