Step-by-step instructions for purchasing an apartment with a military mortgage and a sample purchase and sale agreement

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Savings-mortgage system (NIS) for housing provision for military personnel or the “Military Mortgage” program

This system gives a soldier the opportunity to buy his own home using mortgage instruments at any time after three years from the date of entry into it, without waiting for the completion of military service.

FGKU "Rosvoenipoteka" is a government agency that ensures the functioning of the NIS and is under the leadership of the Russian Ministry of Defense.

All NIS participants included in the register are assigned an identification number and set up a personal savings account.

After 3 years of participation in the NIS, a serviceman can receive a targeted housing loan to purchase a home.

New building (object on the primary housing market)

• real estate under construction, unfinished construction project. New buildings require a contract at the construction stage. When a new building is put into operation, Rosreestr authorities issue certificates of ownership for residential premises.
• Housing targeted loan

– borrowed funds that are provided to a military personnel from the federal budget in pursuance of the provisions of 117-FZ. The size of the loan is equal to the amount of funds that have accumulated in the serviceman’s personal account during participation in the NIS and the state’s obligations regarding the repayment of the mortgage loan.

Accredited new buildings

– objects that have been examined by the Federal State Institution “Rosvoenipoteka” for compliance with the requirements of current legislation.

Secondary housing market (apartment)

– residential premises in relation to which a certificate of ownership has been issued at the time of sale.

Accredited banks

– banks that have official confirmation from the Federal State Institution “Rosvoenipoteka” that they provide loans under the “Military Mortgage” program.

What is NIS

Every year, the state transfers a certain amount - a targeted housing loan (savings contribution) - to the account of military personnel who need housing and have applied for it. This amount is 268,465 rubles. 60 kopecks From the moment the account is opened, transfers will be made for 20 years, unless the contract service is interrupted.

Money from the savings account can only be used to transfer to the seller or to the bank account that provided the mortgage loan. The account is replenished monthly by 1/12 of the annual savings contribution.

If a serviceman dies or goes missing while on duty, his family will be able to receive all the money accumulated from the savings account, or continue to repay the mortgage, in accordance with the executed agreement.

Why is military mortgage the most profitable at Sberbank?

One of the most significant advantages of a military mortgage is that it is carried out with government support.

This allows banks to offer lower interest rates when compared to other programs.

Today, only the Young Family loan is cheaper.

Main advantages:

1. You can buy any type of residential property, including development land.
2. There is no need to confirm income or solvency.
3. It is not necessary to insure the life and health of the client, and no commission is charged for issuing a loan.
4. No guarantors are needed.
5. Taxes paid are refunded on loan interest.
6. A borrower can open a savings deposit using only 1 document.
7. The minimum down payment is 20%, which can be covered with government subsidies.

There is no such favorable combination of all conditions anywhere else. Military mortgages in other credit institutions have a higher rate. This is the main reason that most borrowers choose Sberbank.

Terms of military mortgage in Sberbank

• VI is issued only in Russian rubles.
• The minimum loan amount is RUB 300,000.
• As of December 2021, the maximum amount for a Sberbank military mortgage is RUB 2,398,000.
• In this case, the loan amount should not exceed 85% of the housing price, both under the purchase and sale agreement and according to the estimated value based on an expert opinion. The first installment (15%) is paid either entirely from the funds of the LLP, or with the addition of the borrower’s personal savings.
• The interest rate on military mortgages at Sberbank is 9.5% per year.
• The maximum period for providing funds is 20 years.
• The age of the borrower at the time of repayment of the mortgage should not exceed 45 years.
• The collateral for a mortgage is a pledge of claims (if real estate is purchased on the primary market using an equity participation agreement), and the property itself, for the acquisition of which a loan is issued (after registration of ownership).
• The property is subject to compulsory insurance (against the risk of damage or loss), the life and health of the borrower is insured on a voluntary basis.
• Early repayment of mortgage obligations is possible at any time without any restrictions or additional fees.

On what terms is the loan issued?

Each potential borrower must meet a specific set of requirements. However, contract service automatically means compliance with them.

The main loan conditions are as follows:

1. The client serves under a contract whose term is 3 years or more, or it was concluded before 2005.
2. An applicant who is a member of NIS can provide an individual savings account.
3. The loan is issued in rubles.
4. The maximum loan amount is no more than 85% of the value of the collateral (confirmed by an expert opinion).
5. The maximum loan repayment period is 20 years.
6. Collateral is the property being purchased.
7. The deposit is insured (except for the building plot).
8. It is allowed to repay the loan early.

Accordingly, you should start with the search for housing. It will have to be assessed by ordering the service of a company that is accredited by Sberbank. The appraiser's report will be used to calculate the maximum loan amount.

How to apply for and repay a loan

The client can choose where to get a mortgage. You can submit documents to the department at your place of registration, or at the location of the property you are purchasing. The application is reviewed within 6 days if the potential borrower has provided a complete package of documents.

You need to start by obtaining a certificate for a targeted housing loan. This document is issued by Rosvoenipoteka. You can submit an application on the website https://rosvoenipoteka.ru along with the necessary documents.

After this, a personal account is opened in the name of the serviceman, into which accruals will be made annually from the state budget.

After 3 years, you can receive a certificate and apply with it to Sberbank to apply for a loan. When the application is approved, the standard procedure for registering a mortgage agreement, collateral and its insurance is carried out.

Next, the client repays the loan amount in accordance with the established schedule. The contributions from NIS that continue to be deposited into his account every month are immediately used to pay off the debt.

Sberbank requirements for the recipient of a military mortgage:

1. Citizenship of the Russian Federation.
2. The borrower must participate in the NIS (savings and mortgage system), which is confirmed by entry into the appropriate register with the assignment of an individual number. Participation in the NIS program is possible both on a voluntary basis and on a mandatory basis. The procedure is regulated by Order of the Minister of Defense of the Russian Federation No. 245 dated April 24, 2021 “On approval of the procedure...”. With the beginning of registration as a participant in the NIS, the mechanism for processing documents and opening a savings account in the name of a military personnel is launched; the amount of annual contributions from the state is regulated by the corresponding article of the budget of the Russian Federation. The bodies involved in data processing (RUZHO and JO of the Ministry of Defense of the Russian Federation) transmit information to the Federal State Institution “Rosvoenipoteka”, on the basis of which a Certificate of entitlement to receive CZZ is issued. This document will need to be submitted to the bank.
3. The minimum age of the recipient of the loan product is 21 years, the maximum age for this program is 45 years.

Recommended article: Online military mortgage calculator - how to calculate, apply and pay

On what conditions does Sberbank transfer money?

The application must be approved not only by the bank, but also by Rosvoenipoteka. Only after approval from both sides is a transfer made to the seller’s account. Typically, the period for consideration of an application for a loan by a bank is 1 week, while the period for consideration of an application at Rosvoenipoteka is 2-3 weeks.

The bank will help you draw up a purchase and sale agreement. Then you can proceed to signing it and registering it with Rosreestr.

Upon acceptance of the application and documents, a certificate of acceptance is issued in return listing all accepted applications. This receipt must be immediately submitted to the bank branch. Within 1-2 days after this, the money is credited to the seller’s account.

Preliminary agreement on military mortgage

The preliminary agreement for the mortgage loan will be the purchase and sale agreement. When a loan is made through a financial institution, it needs proof that the property being used as a mortgaged property can be converted into a temporary encumbrance - collateral to the bank.

While the mortgage is being repaid by the client, the bank will have the collateral (the real estate itself); as soon as the entire debt is repaid, the property will be re-registered again, but to the buyer - a military man who paid part of the loan, and the other part of the loan was repaid by the NIS system from military savings.

The structure of the preliminary contract, which is fundamental to the mortgage transaction, must contain the following points:

1. Be sure to write the title of the document at the top center of the line and indicate that the agreement is preliminary.
2. Next comes the representative paragraph, which identifies the parties to the transaction. The parties in this case will be the Seller and the Buyer.
3. After this comes the first paragraph, which briefly describes the Subject of the agreement.
4. The second point is the Essential Conditions, where the content will be as follows:
   who owns the object;
5. to whom is it sold?
6. what is its cost;
7. how the purchase will be paid for - partly from the funds of the Central Housing Loan, and partly through the efforts of the buyer, who has become a borrower of the bank;
8. Bank's name;
9. mechanism for transferring collateral to the bank;
10. expenses for registration and registration in the Unified State Register.
11. The third point covers the timing of the transaction.
12. Fourth, the guarantees that may be provided to the parties.

The final provisions always reflect the details of the parties, their signatures and transcript. In addition to the preliminary contract confirming the purchase and sale, there is also a preliminary mortgage loan agreement.

It is produced in order to maximally guarantee the Seller that the buyer is solvent.

But this happens when the Seller is a legal entity - for example, a developer selling ready-made new housing.

If a serviceman wants to participate in shared construction, then a separate agreement will also be concluded with the Developer.

Sample contract.

How much can you get for a mortgage at Sberbank?

You can find out what the maximum loan amount will be in this particular case after assessing the property being purchased. In any branch and on the website there is a list of accredited companies where you can order this service.

The appraiser's official report is used to calculate the loan amount, the size of which is limited by the upper limit - 2.33 million rubles.

For example, the appraiser's report showed that the apartment costs 3 million rubles. The loan limit is 85% of the appraisal amount. In this case, 3,000,000 x 0.85 = 2,550,000 rubles. However, taking into account the upper limit, the client can only be given 2.33 million rubles. He will have to pay the remaining amount himself in the form of a down payment.

It is no coincidence that a requirement was introduced according to which a mortgage can be applied for after 3 years have passed from the date of registration with the NIS.

If this was done, say, on January 15, 2020, then after 3 years 268,465 rubles will have accumulated in the serviceman’s savings account. 60 kopecks x 3 = 805396 rub. 80 kop. This money can be used for a down payment (minimum 20% of the value of the deposit).

Advantages of the Military Mortgage program

• it does not matter in which region of the country residential real estate will be purchased;
• a serviceman has the opportunity to buy housing that he chooses himself;
• the right to participate in the program is not related to the serviceman owning housing;
• After 3 years of participation in the NIS, a serviceman can use the right to purchase housing at any time;
• the lowest interest rate for using a mortgage loan (from 8.7 to 10.5 percent per annum); analogue of “civil mortgage” - from 13 percent and above (savings per year from 77 thousand rubles);
• When purchasing an apartment, military personnel do not need to use their own funds for the down payment.

The sooner a serviceman uses his right, the better he will solve his housing problem!

The primary housing market has a number of advantages

• low cost. Low price per square meter at the beginning of construction (with each stage of construction the price per square meter increases;
• savings - housing is cheaper by at least 20 percent compared to secondary “finished” housing;
• lowest transaction costs. In most cases, new buildings are sold without the participation of realtors;
• the soldier’s neighbors are mainly colleagues, or people of the same social status;
• modern type of house, new communications;
• legal “purity” of the transaction;
• simplicity of the transaction. In most cases, paperwork will be completed without the direct participation of the military personnel;
• the risk of transaction failure due to the actions of the developer (seller) is minimized;
• additional risk insurance for NIS participant (this is a requirement of the Federal State Institution “Rosvoenipoteka”);
• additional inspection of residential real estate under construction;
• the transaction is concluded in accordance with Federal Law-214 - the law “On participation in shared construction” (additional guarantees for the NIS participant).

Disadvantages of the primary housing market:

• expenses for finishing work;
• on average, construction time is 1-1.5 years;
• a small selection of accredited new buildings.

The secondary market has a number of advantages

• established infrastructure;
• shortest time to move into an apartment due to its acquisition;
• NIS participant has the right to purchase housing in any city/district.

Disadvantages of the secondary housing market:

• higher cost of housing compared to new buildings;
• hidden defects;
• deterioration of communications and the house itself;
• a complex and lengthy (compared to new buildings) transaction procedure, which requires the direct participation of a military personnel.

What requirements must the borrower and the purchased property meet?

Sberbank's requirements for military personnel are minimal. The client's age is still over 21 years old; contract service in the ranks of the Armed Forces of the Russian Federation and participation in the NIS are required.

A pledge is a different matter - the list of requirements for it is much longer:

1. The seller has owned the property for more than 3 years. This reduces the risk of facing a lawsuit from disgruntled relatives.
2. The sanitary and technical condition of the building is satisfactory.
3. There is heating, and service agreements have been concluded with the housing and communal services.
4. There is hot and cold water supply, a bathroom, ventilation, and a kitchen.
5. If there is a redevelopment, then it is legalized and reflected on the plan, included in the BTI documents.
6. Private houses must be built from reinforced concrete slabs or bricks and meet fire safety standards. A house made of timber or foam blocks will not be accepted for consideration.
7. Nearby (within the area) there is all the necessary infrastructure: schools, kindergartens, shops, hospitals, as well as public transport.
8. No encumbrances.
9. In a private courtyard there should be no emergency buildings subject to demolition.

All these demands are justified. Their goal is to approve an object with maximum liquidity for collateral. If for a number of reasons the borrower turns out to be insolvent, the collateral must be guaranteed to ensure the repayment of the debt after its sale. Illiquid real estate is difficult to sell.

Military mortgage interest rate

It is easy to verify the profitability of Sberbank’s offer by comparing conditions in other credit institutions. Sberbank offers a rate of 9.5% per annum.

The terms of other major lenders are listed in the table.

Gazprombank offers conditions similar to Sberbank. The main difference is that you can buy not any housing, but only an apartment. If the borrower wants to build a house himself, or purchase a ready-made cottage or townhouse, then he will have to return to Sberbank’s offers.

Rules for calculating the loan amount and monthly payment

The total cost of the loan (FLC) includes all additional costs that the payer will inevitably incur in addition to the rate that is announced. This includes appraiser services, insurance of the acquisition object, and other expenses.

For a military mortgage at Sberbank, the PSK is:

1. For housing under construction – 12.54%.
2. For finished housing – 12.54–12.93%.

For example, a borrower received a loan of 2,000,000 rubles to purchase an apartment under an equity participation agreement in construction. For this amount:

PSK = 2000000 x 1.1254 = 2250800 rub.

This is the amount that the borrower will ultimately return to Sberbank after the mortgage is fully repaid. Let's assume the loan term is 5 years. Then the monthly payment amount will be:

2250800 / (5 x 12) = 37513.33 rub.

Since 22,372.13 rubles are received monthly into the serviceman’s account under the NIS program, he will only have to pay off the difference at his own expense:

37513.33–22372.13 = 15141.2 rubles.

In each specific case, the calculation will be individual, taking into account the terms of the loan, the selected loan object, and other parameters. But in all cases, regardless of the calculations, the general rule applies: the shorter the loan repayment time, the less the client will pay in excess of the borrowed amount.

Documents provided by the borrower

Before issuing a loan and signing a bill of sale, it is important to make sure that the seller has the documents:

1. Extract from the Unified State Register of ownership (all co-owners must be listed).
2. Notarized waiver of the pre-emptive right of the participants in shared ownership.
3. Notarized consent of the spouse to sell, or a notarized statement that the seller was single on the date of acquisition of ownership.
4. An extract from the Unified State Register confirming the presence/absence of encumbrances on this property.
5. A copy of a document confirming that the seller has legal ownership rights (deed of sale, deed of gift, certificate of inheritance, etc.).
6. Permission from the guardianship and trusteeship authority to sell when the seller has minor children.

All this is presented when the seller is an individual. When an apartment (other real estate) belongs to an organization, you will need to put together a different package.

It includes:

1. The Charter, including all changes and additions to it.
2. Extract from the Unified State Register of Legal Entities (validity period: 60 days).
3. A document certifying the authority of the person authorized to sign (for example, Minutes of the general meeting of shareholders, etc.).

Housing under construction is often purchased with a mortgage. For apartments in an apartment building in a residential complex, agreements for shared participation in construction are concluded. Sberbank will approve such an application.

You will need to obtain from the developer company and submit:

1. Construction investment agreement, if the other party is the developer. In other cases, an agreement on the assignment of rights of claim and the initial investment agreement, as well as a notarized consent of the spouse of the person who assigned the right of claim to the transaction (a notarized statement that on the date of signing the investment agreement, this person was not married) must be submitted.
2. Construction permit.
3. Agreement for the purchase or lease of land for construction.
4. Permission to commission a construction project.
5. Transfer deed for the apartment.
6. A letter from the developer to the authorized body on the method of ensuring the obligation to the participant in shared construction.

Since the borrower may wish to purchase a plot for construction, his package of documents will differ.

To do this you need to submit to Sberbank:

1. An extract from the Unified State Register confirming ownership of the construction site.
2. An agreement with a company that will build a house, lay communications, and carry out other construction work.
3. Construction estimate.
4. Construction permit.

The borrower himself creates the main package of documentation. This includes his personal documents and others.

Additionally provide:

1. Client's passport.
2. Appraiser's report on the value of housing (valid for 6 months).
3. Application according to the bank form.

It is not necessary to submit these documents immediately. First you need to wait for your application to be approved. After this there are 60 days left for collection. You should not miss this time, otherwise you will need to re-apply.

What is the procedure for obtaining a military mortgage at Sberbank?

The sequence for issuing a loan is determined by the bank and is valid for everyone who applies for the Military Mortgage program. The procedure for obtaining a loan is as follows. The future client needs to select a locality and branch where it is convenient for him to submit an application.

Sequencing:

1. Obtain a certificate from Rosvoenipoteka for the right to receive a targeted housing loan.
2. Submit an application to Sberbank (you can do it online).
3. Wait for a positive decision (up to 7 days).
4. Collect all documents (up to 60 days).
5. Sign a mortgage agreement, take out home insurance.
6. Receive money and pay the seller.

Despite the signed agreement on specific terms for the return of funds, you can pay off the debt ahead of schedule. There is no additional fee for this. As soon as the loan is repaid, the bank will remove the encumbrance from the collateral and it can be disposed of freely.

Is it worth taking out a military mortgage?

The subtleties of completing a mortgage transaction for the military lie in several areas - organizations, representative offices of government agencies responsible for subsidizing and providing preferential conditions to military personnel and citizens of the Russian Federation.

It is thanks to the presence of an appropriate document confirming the status of a beneficiary - an NIS participant certificate - that the bank can agree to lend money to this category of potential borrowers.

In total, we can distinguish 4 areas in which key structures, organizations, and institutions are involved:

1. Executive authorities, an offshoot of the Ministry of Defense of the Russian Federation - FGKU "Rosvoenipoteka". It is this institution that controls the coherence of the NIS system (savings mortgage system).
2. State department - Department of Housing of the Ministry of Defense of the Russian Federation. Here the register, accounting, and distribution of NIS participants are formed.
3. TsZHZ (Targeted Housing Loan) - money that is accumulated by the military during the period of their involvement in the NIS system, which is partially contributed by the state as a subsidy.
4. UNIS - this Office helps to increase the efficiency and balance of monetary expenditures of NIS participants when the right to obtain a mortgage on preferential terms comes to fruition.

Many experts admit that a military mortgage actually has more pros than cons. Of course, newcomers must first serve a certain period of time, and then only count on a mortgage.

It is also necessary to separately become a member of the NIS system so that deductions for a mortgage loan are already made from the military personnel’s salary.

The disadvantage may seem that the minimum volume of the loan itself may be the bank’s offer of only 2.4 - 2.5 million rubles.

But this amount is not always enough to buy an apartment. But, fortunately, not all banks lend to their clients so succinctly, especially to such profitable ones as the military.

The benefits for a military serviceman who holds a certificate (certificate) certifying the right to receive benefits include the following benefits:

1. It is enough to work under the contract for a short period of time (for example, 3 years), and you can already get a mortgage on favorable terms using subsidies from the state budget and your savings.
2. With the benefit money you can pay off the initial payment or pay the bank for interest.
3. You can purchase a second real estate property.
4. It is possible to choose an apartment, house or other real estate in any region of the country.
5. A military man can keep his service apartment if the property he purchases is located far from the place of service.

In addition, it is now possible to repay the mortgage early, which in itself is a plus for many clients.

Typically, this advantage is enjoyed by those military personnel who regularly receive bonuses in addition to their salaries.

It is enough to notify the bank a few days in advance (by law - 30 days) of your intention to repay part or the full amount of the mortgage ahead of schedule by submitting a special application.

Also, a separate clause of the contract must stipulate how and under what conditions the client must pay the advance amount.

When drawing up a mortgage agreement to provide a loan for the purchase of residential real estate to military personnel, certain nuances will always appear.

It is necessary to take into account insurance, collateral, terms, cost, object parameters, controversial issues, rights and obligations of the parties.

Therefore, all this and much more cannot be briefly described in detail. However, the details must be reflected in the clauses of the agreement so that the parties can turn to them for answers at any time if any questions arise during the course of the contract.

The nuances must be spelled out clearly and clearly, without any suspicious or incomprehensible wording, which is why such agreements should be drawn up by specialists with experience in legal practice.

Where to remove mortgage encumbrances from an apartment, read the article: removal of mortgage encumbrances. You can find a calculation of early mortgage repayment here.

Mortgage repayment for large families is discussed on this page.

Summarize

Since until the debt is repaid, real estate is pledged not only to the bank, but also to the state, this type of lending is one of the lowest risk. Thanks to this, military personnel receive the most advantageous offer.

This is confirmed by the huge demand for the program among the population. In 2017, more than 11 thousand loans were issued under it for a total amount of 20.5 billion rubles, which is 150% more than in 2021.

The forecast for rising real estate prices leaves no doubt: housing will become more expensive. The sooner the loan is issued, the cheaper it will end up costing the buyer.

Taking into account government support, we can only expect an increase in demand for the Military Mortgage program at Sberbank in subsequent years.

Documents on Sberbank military mortgage

In order for bank specialists to consider an application for this product, you must submit a minimum set of documents. It includes:

• questionnaire of a potential borrower;
• passport of a citizen of the Russian Federation (required for presentation);
• NIS participant certificate;
• documents relating to the purchased housing (title documents and preliminary purchase and sale agreement).

Sberbank mortgage application form

Before contacting the bank, you should find out exactly what amount has accumulated in your personal account during the period of participation in the program; you may need to attract personal savings. It is also necessary to clarify the bank’s current requirements for real estate. Original title documents for the property planned for purchase can be submitted within 2 months after approval of the loan application. You can calculate a military mortgage at Sberbank on the official website of the institution.

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