Options for using maternity capital to improve housing conditions

The law allows the use of maternity capital for any transactions if they are formalized and carried out legally. First you need to decide where exactly the financial assistance is going.

The Housing Code defines several categories of real estate that are considered residential premises:

1. Parts of residential buildings or apartments.
2. Complete residential buildings and apartments.
3. Rooms.

Funds are allocated to address the following issues:

• Purchasing a residential property or repairing it with the involvement of a contractor.
• Construction and reconstruction of residential premises without the participation of contractors.
• Compensation of costs for an object that was built or reconstructed.
• Payment for participation in shared construction with various objects.
• Initial payments when obtaining loans.

Reference! Until the child reaches the age of 3 years, maternity capital can be used to improve housing conditions only in the case of a mortgage. In other cases, you must wait until you reach the specified age.

Buying land to build a house

The main condition for use is that the land plot itself be owned by the person who received financial assistance.

You can use several methods to register property rights:

1. Purchase of the corresponding plot.
2. Registration of inheritance rights.
3. Drawing up a rental agreement.

It is especially important to approach the issue competently when choosing a construction company to perform part of the work. It is important to look at which areas these specialists have already participated in the construction of.

According to the rules, funds are transferred to the account only after providing and studying the following documentation:

• Proof that the family will receive ownership of the property no later than six months after the work is completed.
• Permission to erect a residential building, issued in writing.
• Legal documentation.
• The certificate itself.
• SNILS.
• Identification document.

Home construction

If this task is solved on their own, the law sets certain time limits. The foundation of the house and the frame must be ready no later than six months after receiving the money. Less time is needed for work in which representatives of a construction company are involved.

It is also useful to read: Is it possible to take out a loan against maternity capital to build a house?

Reconstruction of a house using maternal capital funds

Reconstruction is work that results in a qualitative improvement in the basic technical characteristics of the house.

These actions include:

1. Converting an attic into an attic.
2. Superstructure of floors.
3. Increase in area.

You can ask for financial assistance in advance, or apply after the project has been put into practice. For the latter case, it is important that everything is formalized, keeping receipts for the purchase of materials and equipment.

Reconstruction does not include:

• Parquet flooring.
• Replacement of pipes and other similar finishing works.

Therefore, such expenses cannot be paid from maternity capital funds.

Buying an apartment or house (with partial payment with maternal capital)

When buying a home using maternal capital, the main thing is to avoid housing that has one of the following characteristics:

1. Dilapidated.
2. Emergency.
3. Unsuitable for habitation.
4. With wear of 50% or more.

It is important that the building is located within populated areas where you can get access to any public service institutions or education for children.

To cash out maternity capital, they often use a scheme that involves purchasing housing from relatives. Therefore, regulatory authorities always check such actions, carefully assessing all the factors associated with them . It is better to carry out preliminary approval by submitting technical and legal documentation to the regulatory authority.

Important! We must remember that the purchase of land is formalized using a separate agreement.

Purchasing real estate with a mortgage using MK

For banks, obtaining a mortgage using maternity capital can become a relevant additional guarantee. Its use increases the chances that the decision will be positive. But not every applicant is given such assistance. It is necessary to have not only a stable income, but also a permanent official job. Maternity capital is a kind of insurance; it can be used to pay off down payments or principal debt.

When you deposit a large amount at once, it is easier to pay off current debts. This reduces your total monthly payments. The main thing is to contact the employees of a reliable bank, one of the largest participants in the transaction.

How can I spend a certificate before my child reaches 3 years of age?

The law states that until a child turns 3 years old, payments in connection with maternity capital can only be used to pay off the mortgage. But you can always find a way out of such a situation that suits both parties.

You can build a house before the child is 3 years old. The main thing is to keep all documents to confirm expenses. After reaching the appropriate age, they are sent to one of the nearest Pension Fund branches.

In addition to SNILS and the certificate itself, along with a civil ID, a package of additional documentation is required:

• Evidence of expenses incurred.
• Written confirmation that after at least six months the family will own the home.
• Certificate of participation in the state program for building a house.
• Document on property rights.

Attention! It is beneficial to take out a mortgage from a bank if your own finances are not enough to resolve the issue. Thanks to government assistance, it is easier to pay off the debt, in whole or in part.

The list of documentation largely coincides with what was mentioned above:

1. Proof that after six months the family will receive ownership of the property.
2. If construction has not yet been completed, a copy of the document associated with the building permit will be required.
3. Proof of ownership. Required for any objects, regardless of whether construction is completed or not.
4. A certificate from the bank describing the balance of the debt.
5. Mortgage agreement.
6. Maternal certificate.
7. SNILS.
8. Documents for identification.

The following most reliable financial organizations help solve housing problems:

• Bank opening. Particularly aimed at new buildings and shared construction.
• VTB 24.
• Alfa Bank.
• Bank of Moscow.
• Sberbank.

Most organizations have standard rates of 12-14%. From 5 to 50 years will be the standard debt repayment period. But individual conditions may vary depending on the specific client.

Notaries help draw up agreements for the fulfillment of obligations. It is recommended to contact them so that the documents do not lose their legal significance.

Notaries ensure that agreements meet the interests of each interested party - this applies equally to both spouses and children. The size of the share for each family member is fixed on paper without fail. To allocate a share to the father, it is necessary to follow the official registration of the marriage itself.

Such agreements do not affect existing terms from banks and should not change the current debt. They simply become an additional guarantee for citizens.

How to get maternity capital?

Before spending maternity capital, you need to receive it. The certificate is personal. This means that it is issued to one of the spouses - usually the mother of two or more children. She will be the holder of the certificate - Art. 5 Federal Law No. 256.

You cannot apply for a certificate right away. First you need to determine how exactly your living conditions will be improved.

Example:

Ivan and Natalya have a second child. Only the husband works, and the wife raises the children. The available square meters in the one-room apartment are not enough. Ivan turned to Sberbank in order to get a loan to purchase a more spacious home. The income made it possible to obtain a mortgage. Then Natalya contacted the Pension Fund and wrote an application to receive a certificate with maternal capital. The Pension Fund of Russia studied the nuances of the transaction and approved the issuance of MK. Ivan and Natalya were able to send a certificate for the first mortgage payment.

There is nothing difficult about obtaining maternity capital. It is enough to submit an application in one of the following ways:

• through the Multifunctional Center (My Documents);
• on the State Services website;
• in person at the Pension Fund branch.

The further course of the procedure depends on how you submit your application. If you visit the Pension Fund in person, your documents and application will be checked on the spot. When applying through State Services, you will have to come to the Pension Fund and check the copies with the originals.

The final decision on issuing a certificate for MK is made within 15 working days . It may even take longer if during the inspection there are delays in other departments (for example, in the Federal Tax Service or Rosreestr). The notification is prepared within 5 days, after which a certificate is issued - in paper or electronic form.

Many people ask how to get the full amount of maternity capital? There are no restrictions on the use of money (except for payments - strictly non-cash). The family can spend all the target funds on one transaction. It is more logical to use maternal capital to pay off a mortgage or build a house.

Options for improving living conditions using maternal capital

Acceptable options for using mat. capital in order to resolve the housing issue are spelled out in Art. 10 of Law No. 256-FZ of December 29, 2006. You can acquire personal square meters as follows:

• purchase housing directly from the seller under a sales contract;
• build;
• finance shared construction;
• join a housing cooperative;
• take out a mortgage loan.

The legislation on maternity capital also allows:

• reconstruction of existing buildings;
• reimbursement of expenses for an already constructed house;
• payment of debt on previously issued housing loans.

The use of the certificate for the above purposes is possible only subject to certain restrictions:

• the object being acquired or under construction is located within the borders of the Russian Federation;
• the child for whom financial assistance from the state has been assigned is 3 years old (the condition does not apply to cases with a mortgage);
• the acquired property is registered in the name of all family members, including those born during the period of ownership of the certificate (shares are determined by agreement of the parties).

Moreover, each of the presented methods of using the certificate has its own special conditions and rules, which are approved by government decree No. 862 of December 12, 2007. We will consider them further.

Mortgage credit lending

The main feature and advantage of buying a home with a mortgage using maternal capital is the ability to use the certificate before the child turns 3 years old. In this case, you can use the funds in two ways:

• send to the bank as a down payment;
• pay off existing mortgage debt.

The chosen purpose must be specified in the application to the Pension Fund. If a down payment is paid, the accompanying documents will be:

• a copy of the loan agreement;
• a receipt confirming the obligation to allocate a share in the purchased property to each family member no later than 6 months from the date of removal of the encumbrance.

If interest and principal are paid, the Pension Fund will require:

• a copy of the loan agreement;
• a certificate from a credit institution about the balance of debt;
• extract from the Unified State Register of Real Estate;
• a receipt for the obligation to share the registration of the apartment (if the registration was previously carried out in a different way).

It will be possible to repay a mortgage debt using maternity capital only if the certificate holder or his spouse appears in the loan documents. If the loan was taken by their parents, funds will not be provided for such purposes.

In addition to the opportunity to take advantage of maternal capital, families with two or more children in 2020 have access to preferential mortgage conditions. According to government decree No. 1711 of December 30, 2017, they are entitled to subsidize the mortgage loan for 3 years for the second child and 5 years for the third. All this time, the borrower repays the loan at a preferential rate of 6%, and everything above that is financed by the state.

Construction or reconstruction of a house on a site for individual housing construction

The use of maternity capital in this area is possible only after the child turns 3 years old.

Construction of an individual housing construction project is possible on a land plot with a type of permitted use for individual housing construction (IHC).

Land for dacha construction (SNT) or personal subsidiary plot (LPH) does not give the right to build a residential building on it.

Therefore, it is impossible to direct MSC funds for the construction or reconstruction of an individual housing construction project on land plots not intended for this purpose.

The land must belong to the certificate holder or her spouse based on:

• ownership;
• rent, free use of land;
• permanent (unlimited) use;
• lifelong inheritable ownership.

In the case where the owner of the certificate or her spouse are not the owners of the land, the period of lease or gratuitous use by the law on maternal capital is not determined by the minimum value, but it must be valid at the time of receipt of MSC funds.

If the land and (or) the house already belong to the children (for example, they inherited it from their grandparents), then construction or reconstruction of the house using capital is impossible. This is due to the fact that the constructed residential building must be registered as the property of all family members after the completion of construction or reconstruction of the facility.

Construction or reconstruction of an individual residential building is possible either independently or with the involvement of a construction organization.

If a contractor is involved, then, on the basis of a contract, payment is made from federal funds directly to the account of the construction organization in the amount specified in the application, but not more than in the amount specified in the contract.

If the owner of the certificate decides to start construction on his own, then the procedure for receiving state support in the form of maternity capital is as follows:

• Once the documents for the land have been received, it is necessary to obtain a building permit from the local administration - it must be issued to the owner of the certificate or his spouse. If the land was inherited or acquired and a building permit was obtained by the previous owner of the site, a new permit should be obtained.
• After this, you must submit an application to the Pension Fund of Russia, attaching the specified documents and indicating your bank account number. Within 2 months after submitting the application, half of the capital amount will be transferred to the bank to the account of the certificate holder.
• Next, the family needs to build a foundation and walls, cover the roof, and then obtain confirmation of this from the local authorities, which have given permission to build the facility.
• After this, you can submit a second application to the Pension Fund to receive the remaining part of the mat. capital, but not earlier than 6 months after submitting the first application. The balance of funds will also be transferred directly to the bank account of the certificate holder or his spouse no later than 2 months after submitting the application.

Reconstruction differs from construction in that the residential property already exists at the time the work begins and there is a need to increase its living area.

Repairing a house, even a major one, without increasing the living space does not qualify as reconstruction! Also, according to the law, only a residential building can be reconstructed - an apartment, even if it is located in a one-story two-apartment building, is not subject to reconstruction.

As with the construction of a residential building, permission must be obtained from the local government for reconstruction.

To receive maternal capital funds, not only the land plot, but also the house itself must belong to the owner of the certificate or his spouse on the basis of one of the rights of ownership or use.

Otherwise, the procedure for obtaining funds is the same as for building a house.

Purchase and sale transaction

To improve living conditions using MK means, there are 2 methods:

1. spend the money by paying the expenses in full,
2. supplement the amount missing after using the certificate with your own money.

When the purchase and sale of housing takes place, an agreement is concluded. Its participants are two counterparties - the seller and the buyer. When a purchase and sale is concluded using MK, you need to know that there will be a third party to the transaction. This function is assigned to the Pension Fund. Due to the fact that the Pension Fund will begin to consider the possibility of carrying out the transaction for some time, and some more time will be needed to transfer money to the seller by bank transfer, this will cause a delay in payment. Thus, the full amount will appear in the seller’s account only after a few months.

In the case when the contract is drawn up using maternity capital, this transaction has a number of features. This should contain information regarding:

• the amount that is planned to be deposited immediately,
• the amount that it was decided to transfer using MK funds,
• property rights. In this case, the family becomes the owner of the home only after full payment of all funds (including MK).

The agreement that the transaction will be carried out in several steps is certified in writing by both parties - the seller and the buyer.

1. First, they come to Rosreestr and register the deposit paid by the buyer from their own funds.
2. After a certain time, the seller receives a transfer from the Pension Fund of Russia, after which he is obliged to remove the deposit and re-register the property to the family.

Basic conditions

As practice shows, issues related to the state subsidy under study concern many citizens. In particular, due to the fact that a huge number of features have to be observed.

Do you want to use maternity capital to improve your living conditions? The rules that the family must follow will be as follows:

• the use of the subsidy is permitted only after children turn 3 years old (but there are exceptions);
• children for whom funds are allocated must have Russian citizenship;
• when applying for a mortgage, the family must have a decent and stable income;
• six months after registering ownership of housing, parents are required to register shares in the apartment/house purchased at MSC expense to their children.

It is this last feature that worries many parents today. Especially those who do not consider it necessary to provide children with housing for the future.

By law, parents are indeed required to allocate shares to all their minors if the housing was purchased, built or reconstructed at MSC expense. But in reality, many do not follow this instruction. The family’s housing will not be taken away, but parents may be forced through the court to allocate shares in the house or apartment to minors.

Reconstruction and construction

But this is far from the only scenario. You can use maternity capital for housing reconstruction. What it is?

Reconstruction is usually understood as the conversion of non-residential premises into suitable premises for living or an increase in the area of ​​the premises by creating residential extensions.

The emergence of property rights to housing plays a significant role in reconstruction and construction. If we are talking about property that came into the possession of the family from the beginning of 2007, then the exact date of receipt of their own apartment/house does not play any role. Construction of a house requires the emergence of ownership rights to it after January 1, 2007. Otherwise, it will not be possible to use government subsidies for construction. If the house has been put into operation since 2006, citizens can receive compensation for expenses incurred to purchase housing.

Reconstruction or construction can take place either through a contract or on your own. In the first case, the funds spent on the mentioned operations will be transferred to the contractor in the form of a non-cash payment. In the second, the money transfer occurs in several stages.

Namely:

1. 50% of all expenses are reimbursed before construction begins. To do this, they bring to the Pension Fund: a certificate of ownership of land allocated for individual housing construction, or a certificate of ownership of housing subject to reconstruction, permission to carry out a particular operation, a certificate from the bank indicating the existence of an account with the recipient.
2. The remaining funds are allowed to be received only six months after the completion of reconstruction or construction. It is enough to bring an application and documents confirming expenses to the Pension Fund.

In fact, everything is not as difficult as it seems. How else can housing conditions be improved using maternity capital?

Documents for transactions

Obtaining maternity capital to improve housing conditions was discussed earlier. Now it is clear what documents may be useful in order for the family to be issued the appropriate certificate. What kind of paperwork is required when directly sending a subsidy for a particular operation?

The general package of documents requested to improve the family’s living conditions is as follows:

• a certificate indicating the allocation of funds from the state budget;
• ID cards of all family members;
• certificates of registration of citizens;
• SNILS of the certificate recipient;
• Marriage certificate;
• application for the Pension Fund of the Russian Federation to send MSK for a specific operation;
• certificate of ownership of housing (when purchasing property);
• mortgage or home purchase agreement;
• agreement on the status of shared or cooperative construction (if any);
• documents indicating certain expenses for reconstruction, construction or initial payments;
• building permit;
• documents on state registration of a contractor carrying out repairs, reconstruction or construction of housing;
• account details of the recipient of the funds.

As a rule, no problems arise with the preparation of documents. The exact list of required papers can be clarified at the Pension Fund. They will talk in detail about how maternity capital is allocated to improve housing conditions and what is required for a specific case.