Preferential mortgage from 2021 - mortgage reduction for families with 2 and 3 children

On November 25, 2021, Vladimir Vladimirovich Putin, at a meeting of the Coordination Council for the development of a national strategy for state action in the interests of children, said that from 2021 a special preferential mortgage program should be implemented for families with two and three children. After this, the conditions and goals of the program were approved by Presidential Decree Pr-2440, clause 2 and Government Decree No. 1711 of the Russian Federation. In order to improve the demographic situation, such families should receive government support - they will be able to purchase their own home with a mortgage at a reduced rate of 6% per annum.

The new subsidy is intended to complement the maternity capital program, which is extended until 2022. Young families can count on government support and build their future on a reliable and solid foundation.

Subsidizing mortgages in 2021 - conditions according to Putin’s decree

The preferential mortgage lending program applies to Russian families in which a second and/or third child will be born from January 1, 2021. The rules of the state program were approved by Decree of the Government of the Russian Federation of December 30, 2021 No. 1711. The budget provides funds for subsidizing credit institutions and JSC Housing Mortgage Lending Agency.

Vladimir Putin announced the launch of a new preferential mortgage in 2018 and explained how the subsidy will work. For example, according to the Central Bank of the Russian Federation, the weighted average mortgage lending rate is 10.5%. If a young family with a second or third child purchases housing with a mortgage at this rate, then the state pays a share of 4.5%. As a result, the family will pay no more than 6% per annum for the mortgage. The President emphasized that, according to preliminary estimates from the Ministry of Construction, over 500 thousand Russian families will be able to take advantage of the benefits over the next 5 years.

Important!

A 6% mortgage is issued only for apartments in new buildings and for refinancing an existing mortgage loan. State support is valid for the purchase of an apartment from a legal entity. If transferred from an individual, you will not be able to take advantage of the benefit. Also, the state program does not apply to the purchase of housing on the secondary market.

Validity period of the preferential mortgage program with state support

According to the mortgage law, the state program is designed for the period from January 1, 2021 to December 31, 2022. The budget provides 600 billion rubles to support citizens. State support is aimed at increasing the birth rate in the country. Only those families who are planning the birth of a second or third child between 01/01/2018 and 12/31/2022 can apply for benefits:

• At the birth of the second child. Registration of benefits for 3 years (36 months) from the date of loan issue.
• At the birth of the third child. Registration of benefits for 5 years (60 months) from the date of loan issuance.
• At the birth of 2 and 3 children. Registration of benefits for 3 years, then extension of the subsidy period for another 5 years.

After the end of the preferential program, the interest rate on the mortgage loan returns to the level of the Central Bank key rate plus 2%

Down payment under the new law

The minimum down payment for a preferential mortgage is 20% of the cost of housing. To make a down payment, it is allowed to use maternity capital, employer funds and other government subsidies. The size of the loan and down payment depends on the region of the Russian Federation:

• The maximum mortgage loan amount for regions of the Russian Federation is 3 million rubles. In this case, the down payment must be at least 600 thousand rubles.
• Young families in Moscow and the Moscow region, as well as in St. Petersburg and the Leningrad region, can take out a mortgage in the amount of up to 8 million rubles. With the maximum loan size, an initial payment of 1.6 million rubles is required.

Uralsib Bank allows mortgages without a co-borrower-spouse

Many banks require a spouse to be a co-borrower by default. To exclude a spouse from participation in the mortgage, a prenuptial agreement is required. This is true when the spouse has a bad credit history.

Recommended article: Rosselkhozbank mortgage interest rates for January 2021

Uralsib Bank will only need the notarized consent of the spouse to conclude a loan agreement. In this case, if desired, both spouses can become parties to the purchase and sale agreement (owners).

Which banks also allow notarized consent are in another article - How to take out a mortgage without the participation of a spouse.

Current mortgage rates for today. Rates including discounts (life insurance, young family, salary earner, PV>20%, electronic registration, etc.)

Recommended article: Mortgage and real estate news for March 26, 2021 (selection)

Maria Yurievna Sokhan

Mortgage expert, General Director of the legal agency "Irene", administrator of the portal onipoteka.ru

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Previous collections of mortgage news for today:

Mortgage news: family mortgage for construction, refinancing and maternity capital, Unified State Register of Real Estate for public services, amnesty for self-builders

Mortgage news: reduction in state support rates, new refinancing programs, online personal income tax deductions and garage amnesty

Mortgage and real estate news for today April 2, 2021 (VTB extends the promotion, Uralsib Bank reduces the rate, They want to issue family mortgages for residential buildings, Banks increase mortgage rates)

Mortgage and real estate news for March 26, 2021 (selection) (Rosreestr warned about a new type of fraud)

News from the real estate and mortgage market for March 19, 2021 (Banks are reducing the initial loan and rates, Garage amnesty and Banks are more often refusing mortgage borrowers)

A selection of mortgage news for today – February 16, 2021 (Banks are changing their attitude towards remodeled apartments and other news)

A selection of news on mortgages and real estate for February 1, 2021 (Preferential mortgages after July 1, 2021 will not be available to everyone and other news)

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Author:

Maria Yurievna Sokhan

Publication dateMay 11, 2021May 11, 2021

State mortgage program for young families in 2018

Russian families with one child who are planning to have a second and/or third child in 2021 (or later) can apply for subsidized mortgage payments. Compensation for loan payments is designed to reduce the financial burden on young families, ensuring a significant reduction in monthly payments.

According to the head of the Ministry of Construction, Mikhail Men, subsidizing mortgages according to Putin’s decree 2021 is provided for a period of 3 or 5 years, but there is every reason to believe that by the time the state program is completed, the weighted average rate on a housing loan will approach the same 6%. These are the indicators expected by 2020-2022 in accordance with existing trends.

Putin's 2021 decree on mortgages for families with one child

First of all, state support is provided to improve the demographic situation in the country, so the program does not apply to young families at the birth of their first child. Families with the birth of a second and/or third child after January 1, 2021 can receive mortgage benefits in 2021. In addition, the new decree introduces financial assistance for the birth of the first child - an average of 10,500 rubles for 18 months. This is comparable to salaries in the regions.

Mortgage 6 percent at the birth of 2 children

State support for mortgage payments, according to Putin’s decree, is provided to families for the birth of a second child after 01/01/2018 (inclusive). If the birth certificate of the 2nd child in the family shows a date of January 1, 2021 or later, then a family with two children can pay a special reduced rate of 6% for 3 years. The rest of the monthly payments are subsidized by the state.

Mortgage for a large family in 2021 - state program

The subsidy is provided to Russian families upon the birth of 3 children in the period from 01/01/2018 to 12/31/2022 for a period of 5 years. The new law provides for an extension of the benefit period if both a second and third child appear in the family during the period of the state program. In this case, state support for a period of 5 years is added to the standard grace period of 3 years from the date of loan issuance.

After the 2021 direct line, the president gave instructions to include large families with 4 or more children in the mortgage subsidy program. The changes affected loans issued by credit institutions in Russia and JSC Dom.RF for the construction or purchase of housing, and for the refinancing of previously issued loans.

Mortgage for a young family without children

The new state program does not include subsidies for childless families. However, citizens can also count on reducing the financial burden on the family budget if they decide to have their first child. In this case, the family will receive an average of 10,500 rubles for a year and a half. If during the period of validity of the state program a family decides to have 2 children, then it will be possible to receive mortgage compensation for 3 years.

Mortgage rate reduction in 2021 - how, when and to whom it is given

The state program cannot cover all the expenses of young families, therefore, for preferential mortgages in 2021, by decree of Putin, certain restrictions apply. Depending on the region, there are different total compensation amounts. To receive government support, young families can go to a bank participating in the state program or to the Housing Mortgage Lending Agency.

Interest rate discounts

You can apply for a mortgage at any bank that participates in the state program for subsidizing mortgages in accordance with the decree of the President of the Russian Federation. Regardless of the base rate set by the bank, you will be able to pay your mortgage at a preferential rate of 6%. The rest of the payment (on average 4-4.5%) is paid from the federal budget.

Important!

For the birth of the second and third child, the family is allowed to refinance the current balance of the mortgage loan and continue paying the mortgage at a preferential rate of 6% per annum.

Who is entitled to a mortgage at 6 percent?

Mortgages from 2021, according to Putin’s decree, are available to all adult citizens of the Russian Federation who, during the period of the state program from 01/01/2018 to 31/12/2022, will become parents of a second or third child. The state program of preferential mortgage lending applies to both the birth and adoption of a child. Mortgage subsidies are valid in all regions of the Russian Federation when purchasing housing on the primary market under the following conditions:

• Purchase of housing under construction (under agreement 214-FZ);
• Assignment of the right to claim under the DDU;
• Purchasing a finished apartment or house from a legal entity prior to the sale and purchase agreement.

Important!

Mortgage subsidies do not apply to the purchase of apartments from investment funds and management companies.

Requirements for the agreement and the borrower

To receive a preferential mortgage according to Putin’s decree, a young family needs to contact the Mortgage Lending Agency or a bank participating in the state program. The standard package of documents for a mortgage must include the child's birth certificate. To receive a subsidy, the mortgage loan agreement must meet the following requirements:

1. The loan agreement was concluded in rubles on or after January 1, 2021 (this does not apply to loan refinancing).
2. The total loan amount is 3 million for the regions and 8 million for Moscow and Moscow Region, St. Petersburg and Leningrad Region.
3. The borrower pays the down payment of at least 20% of the cost of housing with his own funds or using government subsidies.
4. Life insurance and collateral insurance contracts must be concluded.
5. The benefit only applies if mortgage payments are made on time.
6. Form of payments - only Annuity.

Refinancing an existing mortgage under a new government program

In addition to obtaining benefits for a new mortgage, citizens can receive refinancing for an existing mortgage loan. It is necessary that the current loan was issued before 01/01/2018. In this case, the mortgage must be issued for the purchase of residential premises in new houses or for the purchase of residential premises under construction or residential premises with a land plot. For refinancing, the amount of loan funds cannot be more than 80% of the cost of housing. If the mortgage meets all the specified conditions, then you can refinance and receive subsidies and state support in accordance with Putin’s decree.

Mortgage interest rate from 2021

Regardless of the established mortgage rates in banks, participants in the state program of preferential housing lending, by decree of Vladimir Putin, will pay a rate of 6% per annum. The benefit is valid for 3 years at the birth of a second child and for 5 years at the birth of a third child in the family. If during the program period 2018-2022 a second and third child appears in the family, you can count on preferential payments for 8 years. Throughout this period, citizens will receive a subsidy and pay for a mortgage at a rate of 6%.

Where and in which bank can I apply?

Preferential interest rates are available at banks participating in the state program, as well as at the Housing Mortgage Lending Agency. In addition, mortgage restructuring is available at these same financial institutions. The current conditions for obtaining a mortgage in Russian banks are shown in the table:

Changes to family mortgage

Family mortgages at Sberbank did not stand aside and the rate also increased by 0.3 percentage points and now amounts to 5.3% per annum.

Rosbank Dom also increased the rate on family mortgages. The minimum rate starts from 5%.

The family mortgage program has received a long-awaited expansion. Now borrowers will be able to build a private house using a family mortgage . Construction must be carried out by a contractor (legal entity or individual entrepreneur). Available for borrowers of Sberbank and the House of the Russian Federation.

A family mortgage is also available by assignment of rights from an individual, provided that this is the first assignment (i.e. the assignor - the assignor (seller) owns on the basis of an equity participation agreement concluded with the developer). But not all banks will let such a deal pass.

List of banks working with Family mortgage on assignment from an individual:

• Sberbank
• VTB
• House of the Russian Federation
• Uralsib Bank
• Raiffeisenbank
• Metallinvestbank.

Recommended article: Reduction of mortgage rates by Sovcombank in 2020

Current rates for family mortgages (second or subsequent child born on January 1, 2018) for today.

Rates including discounts (life insurance, young family, salary earner, electronic registration, etc.)

How to get a preferential mortgage with government support?

The procedure for obtaining benefits has been made as simple and transparent as possible for new borrowers. To take advantage of the opportunities of the state mortgage program by decree of the President of the Russian Federation, you must:

1. Apply for a standard mortgage from a bank.
2. After the birth of the child, provide the bank with a list of documents to apply for the benefit.
3. Pay regular mortgage payments at a reduced rate of 6%.
4. The bank receives compensation from the budget without any additional actions on the part of the borrower.

Possible nuances

The state program replaced the “Young Family” complex of social events, which was completed ahead of schedule in January 2018. Benefits under the “Young Family” program were provided only to citizens under 35 years of age, and the maximum amount of compensation did not exceed 30 or 35% (if there was a child) of the total cost of housing. The new preferential mortgage program according to Putin’s decree is not tied to age or the amount of payments. In addition, now you do not need to contact additional authorities - you can apply for the benefit directly at your bank. Nevertheless, regarding the preferential mortgage 2021 by decree of Vladimir Putin, there are still points that require attention:

• Birth of twins. The issue of the birth of twins is not directly addressed in the Decree of the Government of the Russian Federation. If twins are the 1st and 2nd child in the family, then the long grace period is 3 years. If twins are the 2nd and 3rd children in the family, then the grace period will be 8 years (3 and 5 years).
• Fourth child. The Decree of the Government of the Russian Federation does not indicate that parents of the 4th and subsequent children will be able to use the preferential program. However, when there are 4 children in a family, you can receive maternity capital.
• Refinancing. If you pay off a home loan with an interest rate of 12 percent, then if 2 or 3 children appear in the family during the term of the state program, you can refinance the mortgage. In this case, the rate will be 6%.
• Registration at the bank. The entire procedure for applying for mortgage benefits in 2021 is carried out at a bank or a Mortgage Lending Agency. No other persons or organizations have the authority to issue a mortgage subsidy by decree of the President of the Russian Federation.

Source: Interfax

A compromise ended a meeting with President Vladimir Putin on the fate of the preferential mortgage program, the extension of which became the subject of a dispute between the Central Bank of the Russian Federation and the relevant government bloc, several sources familiar with the situation told Interfax.

Opening the meeting, Putin supported the Central Bank in its concerns about rising real estate prices in a number of regions, while noting that preferential mortgages supported the construction industry.

As a result, the Central Bank agreed to re-extend the program, but with significant reservations, an Interfax source said, citing one of the participants in the meeting with the president.

The Central Bank supports the extension of the preferential mortgage program until the end of 2021, but subject to its modification in order to provide social support and at the same time smooth out the negative effect of rising housing prices, he said. According to the regulator’s position, after 2021, only targeted programs to support preferential lending in the housing construction segment are possible.

According to two Interfax interlocutors in the financial market, at the moment the main compromise option is that the program may not be extended for all regions - where housing prices have increased especially strongly, preferential mortgages will be curtailed from July 1. One of the agency's sources named Moscow, St. Petersburg and the Krasnodar Territory among such regions. However, the decision to extend the program minus several regions has not yet been made; other options are possible, another Interfax interlocutor said.

The preferential mortgage program for new buildings at a rate of up to 6.5% per annum began working in mid-April 2021 and was scheduled to end on November 1. At the end of October, the program was extended until July 1, 2021. The credit limit under the program is 12 million rubles in the Moscow region, St. Petersburg and the Leningrad region, and 6 million rubles in other regions. Down payment - 15%.

The head of the Central Bank of the Russian Federation, Elvira Nabiullina, stated that the demand for mortgages against the backdrop of a preferential lending program is beginning to acquire the characteristics of a rush, and in a number of regions there is an unjustified increase in housing prices. She noted that there is still potential for the development of the mortgage market, but it is important to prevent the formation of a “bubble” in it.

In turn, Russian Deputy Prime Minister Marat Khusnullin reported that he would seek an extension of the program after July 1, 2021. He stated that the government had prepared proposals for the further implementation of preferential mortgages.

“Results in housing construction were achieved largely thanks to preferential mortgages at 6.5%; now it has been extended only until mid-2021, which affects our final figure for 2021 and subsequent years. Therefore, during the next year we need to decide on the subsequent conditions for implementation. We have prepared a proposal,” said Khusnullin.

In general, officials emphasized that the final decision on the fate of the program will be made in 2021 based on an analysis of market conditions.

Tags: real estate, mortgage, Khusnullin, 2021

Reviews about mortgages according to Putin's decree

The budget provides 600 billion rubles for state support for preferential mortgage lending for young families. Some young families have already taken advantage of mortgage subsidies by presidential decree. Others are eyeing a government program. The majority of citizens evaluate government initiatives positively.

A user with the nickname Moneta from Yekaterinburg writes on the u-mama forum that thanks to the new government program, she is ready to decide on a second child. The only obstacle to creating a large family for her is the housing issue.

Also on the u-mama forum, a user with the nickname Kikimora I Bolotnaya speaks positively about the state mortgage program under Putin’s decree. State support becomes a very important help for a family at a time when only 1 parent earns money. In this case, young people can actually have a second or third child.

However, not everyone reacted with confidence to the preferential mortgage lending program according to Putin’s decree and the Decree of the Government of the Russian Federation. Some people believe that the new program is a deception and a lie before the elections. Others believe that it is necessary to reduce the amount of financial assistance from the budget. In particular, tigra001 on the u-mama forum writes that parents should provide for themselves and their children. In this case there will be no envy or malice towards others.

There are citizens who are confident that any mortgage is a scam from the bank, including mortgages by Putin’s decree, because even taking into account the subsidy, the amount of overpayment remains high. Others are confident that they will not be able to take advantage of the benefit in their region due to restrictions in the state program. In particular, Anonymous on the u-mama forum writes that the program is only suitable for primary housing. Because of this, it is not possible to purchase more affordable housing on the secondary market.

What do you think about the state program of assistance to young families 2018-2022? Will preferential mortgages under Putin's decree bring the expected benefits? Do you plan to take advantage of government support yourself and apply for a subsidy? Please write in the comments. Your feedback is very important to us.