Law on military mortgage: Federal Law 117 on the Savings Mortgage System

Order of the Minister of Defense of the Russian Federation dated July 17, 2020 No. 321 On amending the Rules for the payment of monthly bonuses for special achievements in service to military personnel of the Armed Forces of the Russian Federation serving under contract, approved by order of the Minister of Defense of the Russian Federation dated July 31, 2020 No. 430 chipboard

In accordance with Part 20 of Article 2 of the Federal Law of November 7, 2011 No. 306-FZ “On monetary allowances for military personnel and the provision of individual payments to them” (Collected Legislation of the Russian Federation, 2011, No. 45 Art. 6336; 2020, No. 9, Art. 1132) I ORDER:

1. To introduce changes to the Rules for the payment of monthly bonuses for special achievements in service to military personnel of the Armed Forces of the Russian Federation serving under a contract, approved by order of the Minister of Defense of the Russian Federation undergoing military service under a contract" (registered by the Ministry of Justice of the Russian Federation on August 28, 2020., registration No. 55773), according to the List (appendix to this order).

2. Deputy Ministers of Defense of the Russian Federation, commanders-in-chief of the branches of the Armed Forces of the Russian Federation, commanders of military districts. The Northern Fleet, branches of the Armed Forces of the Russian Federation, heads of central military command and control bodies, commanders of formations, commanders of formations and military units, chiefs (leaders) of the organization of the Armed Forces of the Russian Federation, ensure, from July 1, 2020, the payment of a monthly bonus for special achievements in service to military personnel Armed forces of the Russian Federation performing military service under a contract, in accordance with this order. Minister of Defense of the Russian Federation, General of the Army S. Shoigu Appendix to the order of the Minister of Defense of the Russian Federation dated July 17, 2020 No. 321:

See the appendix to the order and its discussion here >>>

What is the essence of Law 117-FZ on military mortgages

Federal Law 117 regulates the basic rules for accumulating funds and their use for the purchase of housing for military personnel.
According to the savings-mortgage system (NIS), government funds are transferred to the personal account of each participant. A serviceman can receive these funds after 20 years of service (in a number of non-standard cases - earlier, Article 10 of Federal Law 117 talks about this).

https://www.youtube.com/watch?v=ytcopyright

However, the law allows a military man, after three years of participation in the NIS, to apply for a Targeted Housing Loan (CHL) at any time and buy a home without waiting for the end of his service. CZZ is issued in the amount of savings already credited to the serviceman’s account: the longer the military man was a member of the NIS, the more amount he will receive.

That is, while a military man does not have the right to use savings (20 years of service or other reasons), he receives funds on loan from the state. A military person must repay a targeted housing loan only in cases specified by law (Article 15 of Federal Law 117): for example, termination of service at his own request with less than 10 years of service.

If the Targeted Housing Loan is not enough to purchase a home, the military can take out a loan from the bank under the Military Mortgage program. The funds accumulated by this time in the personal account can be used as a down payment on a mortgage (Article 14 of the Federal Law 117), and the loan will be repaid through subsequent monthly transfers within the NIS. Thus, as long as the military man continues to serve and is listed as a participant in the NIS, the state pays for the mortgage.

If a military member participating in the NIS has the right to use funds in a savings account, but he does not take advantage of this, then he has the right, upon dismissal from service, to receive savings and spend them at his own discretion.

Who can apply for participation in the NIS?

What is the essence of the Law on NIS of military personnel?

As noted earlier, in order to receive such a mortgage, a serviceman must “fall” under the relevant law and join the savings-mortgage system (NIS). According to the provisions of the Federal Law “On Military Mortgage”, the following categories of military personnel can apply for preferential loans:

• all citizens who received the rank of officer for the first time after the entry into force of this law (January 1, 2005);
• all citizens who entered into contractual agreements for long-term military service before the entry into force of this law (January 1, 2005);
• all citizens who have an officer rank and returned from the reserves after the entry into force of this law (January 1, 2005), and they must also serve at least 3 years;
• all citizens who served before the start of this law, but re-signed a contract after its adoption (January 1, 2005).

As you can see, the loan described applies to almost all categories of military personnel. By joining the appropriate NIS, citizens have the opportunity to obtain new housing under the terms of a special loan.

The meaning of the federal military mortgage law

According to the law on military mortgages, military personnel who became participants in the NIS were given the opportunity to use funds from a targeted housing loan (CHL) 3 years after being included in the register. During this time, an amount sufficient for a down payment on an apartment accumulated in the account (10-20% of the cost, depending on the bank’s program).

If a serviceman decides to enter into a loan agreement with a bank, then, according to the rules of Federal Law No. 117, he needs to write an application to the Federal State Institution “Rosvoenipoteka” for the provision of funds to the Central Life Loan. After this, he receives a certificate of the right to use the CZHZ money to purchase housing and can already choose an apartment.

Scheme of the Federal Law on Military Mortgage

The most important thing is that the law allows those military personnel who already own an apartment or house in their personal property to become participants in the NIS. Also, military personnel have the right to buy housing in a region other than the one in which they are serving. For example, a person serves in the North, but after the end of his contract he wants to move to the sea in the South. During his service, he can buy a house in the Krasnodar region, for example.

Funds for purchasing housing and paying off loans come from the state throughout the entire service life. These savings consist not only of annual contributions from the federal budget, but also of income from investing money in reliable businesses.

A serviceman has the opportunity to track the movement of funds in his account on the official website of the Federal State Institution “Rosvoenipoteka”.

READ MORE: Elevator Etiquette Rules Advisor

How to become a member of NIS?

What do you need to become a participant in the savings mortgage system?

So, if you are specifically covered by the Federal Law “On Military Mortgage,” then you need to exercise your right to receive preferential lending and, accordingly, new housing.

Becoming a member of the NIS is quite simple: to do this, you only need to inform the unit commander in a written report that you want to take advantage of preferential military lending.

After this event, the serviceman is registered accordingly and informed about it. After a certain period of time, he receives the full right to apply for a special loan.

The provision of preferential loans to military personnel does not depend on whether they have housing or not. If you want to get the described mortgage, you must take into account the basic principles of its provision. More precisely, they are:

• Lending is carried out only in ruble currency.
• Issuing loans in amounts less than 300,000 rubles is not possible.
• The term of the mortgage cannot be less than 3 years and more than 25.
• At the time of closing the mortgage loan, the military member must be no more than 45 years old.
• The state offers an exclusively preferential loan for obtaining housing; the remaining procedures for registration, assessment of the purchased home and other actions on it are carried out at the expense of the military personnel.

A brief overview of the articles of Law No. 117-FZ on the savings and mortgage system for military personnel

What does the accumulative mortgage system for housing provision for military personnel mean?

The essence of the program under consideration is that each military personnel who takes part in it is allocated a certain amount of money every year. It is transferred from the federal budget to a personal account. The amount of revenue is determined every year by law; its size must also be indexed based on inflation data. These monetary resources accumulate and after a certain time can be used by military personnel to purchase housing under a simplified scheme and on preferential terms.

The principle of operation of the mortgage system for military personnel is that a certain amount of money is deposited annually from the federal budget into a personal account opened for each private owner. Its size is prescribed by law for each year.

The function of the regulator, ensuring that the law on the savings mortgage system for military personnel is correctly implemented, is assigned to the federal institution Rosvoenzhilye, created specifically for this purpose.

Program participants do not have to wait until the full amount has been accumulated to cover the cost of the purchased home. They have the right to take the accumulated money and contact the bank to apply for a mortgage. Please note that, subject to continued service, this loan will be repaid using savings contributions allocated by the state. Due to the reduced risks of such lending, large banks have launched a special product called military mortgage, which involves issuing a home loan at a lower interest rate. Currently, about a dozen banking institutions are ready to work under such conditions. It should be borne in mind that the size of the loan allocated by the bank directly depends on how many years the client has left before the age at which he retires.

Mortgage Housing under construction from Alfa-Bank - from 7.99%

Apply now

Federal Law on military mortgage with latest changes

Since 2004, several changes have been made to Federal Law No. 117. The law was supplemented by orders of the Minister of Defense and Resolutions of the Government of the Russian Federation. Briefly about the most important ones:

• On May 15, 2008, Decree of the Government of the Russian Federation No. 370 was issued with a given action algorithm for NIS participants purchasing an apartment on the primary and secondary markets, a residential building, a townhouse or a plot of land for construction under the military mortgage program. Here, for each type of housing, there is a separate list of documents and the deadlines for consideration of applications in Rosvoenipoteka are regulated.
• On April 28, 2013, Order of the Minister of Defense No. 166 was issued with standards for technical issues, registration of participation in the NIS and maintenance of the register. It is addressed to employees of departments of the Ministry of Defense involved in document flow of NIS participants.
• On June 10, 2020, Order of the Minister of Defense No. 245 “On approval of the Procedure for implementing the savings and mortgage system of housing provision for military personnel in the Armed Forces of the Russian Federation” was issued. This law replaced Order No. 166.

The need to develop Order No. 245 arose due to the large number of changes that have been made to the NIS in recent years. The new Procedure provides an up-to-date list of documents for receiving funds to supplement savings. A number of certificates were removed from it.

MORE: Applications to Sberbank from legal entities

Also, Order No. 245 describes the procedure for removing the state encumbrance on housing when a serviceman reaches 20 years of service and 10 years for those who retired on preferential terms.

Important: Order of the Minister of Defense No. 245 “On approval of the Procedure for implementing the savings-mortgage housing system for military personnel in the Armed Forces of the Russian Federation” cancels Order No. 166.

“Military mortgage”: all legislation in 2020

Main document: Federal Law of August 20, 2004 N 117-FZ (as amended on July 29, 2017) “On the savings and mortgage system of housing for military personnel.”

This law regulates the basic provisions for military mortgages not only for contract military personnel, but also for the Ministry of Emergency Situations, the Russian National Guard and other military personnel assigned to non-military positions in organizations operating in the interests of the country's defense and state security.

https://www.youtube.com/watch?v=https:accounts.google.comServiceLogin

Federal Law 117-FZ is supplemented by Government Decrees and orders of the Ministry of Defense:

• Government Decree No. 370 dated May 15, 2008. The document approved the rules for the provision and repayment of targeted housing loans, as well as the rules for obtaining a mortgage. The algorithm of actions, deadlines and lists of documents when purchasing housing for military personnel using a military mortgage are prescribed.
• Order of the Minister of Defense of the Russian Federation dated April 24, 2017 No. 245. Establishes the procedure for forming and maintaining the register of NIS participants, and approved document forms.
• Decree of the Government of the Russian Federation of November 17, 2005 N 686. On additional payments.
• Order of the Minister of Defense of the Russian Federation dated December 23, 2015 N 820. The document approved 6 standard forms of Targeted Housing Loan agreements depending on the direction of use of funds (for the purchase of finished or under construction housing, for paying the first installment on a mortgage, etc.).

Instructions and procedures were also approved by orders of the Russian Guard (dated March 14, 2017 N 79), the Prosecutor General's Office (dated February 28, 2017 N 128), the FSO (dated November 23, 2005 N 450) and the FSB (dated March 13, 2020 N 136).

Rosvoenipoteka and restoration of savings

In accordance with the explanations of Rosvoenipoteka employees regarding the interpretation of 32-FZ, in order for a serviceman to receive the right to restore savings, he must resign after March 18, 2017. Since the state has obligations to preserve the savings of a serviceman who was discharged “without right,” but who can be reinstated in service, these obligations cannot be extended to previous periods. That is why, in order to restore savings, it is necessary to resign after the amendments enter into force (03/18/2017).