What is it?
A mortgage with state support is one of the types of preferential mortgage lending. It is provided to families with children, but not to all, but subject to a number of conditions. The main feature of such a housing loan is the establishment of a record low mortgage rate. For all families participating in the program, it is the same - 6% per annum.
In fact, this type of mortgage does not imply a reduction in the interest rate by the bank. It’s just that the difference between the required percentage and the established 6% is “paid” from the budget. This is precisely the essence of the benefit.
Important! Now the interest rate of 6% is not set for a limited period of time, as it was before (for 3 years for the 2nd child, for 5 years for the 3rd child, for 8 years for the 2nd and 3rd child in in general), but for the entire repayment period of the mortgage.
Conditions for registration for the purchase of housing with state support
Mortgage with government support is a type of social assistance in which the state takes on some of the interest costs, allowing people to take out housing loans on preferential terms.
The main provisions of a government-backed mortgage include:
- reduced annual mortgage interest rate is 12%;
- the maximum term granted is 30 years;
- the maximum amount of the loan provided - for the capital the upper limit is 8 million, for other regions - 3 million;
purchasing an apartment only from a construction company that has a cooperation agreement with the bank;- if the level of income is insufficient, it is necessary to attract borrowers;
- the age of the loan recipient is from 21 years and not higher than 65 years by the time the entire debt is repaid;
- down payment no more than 20%;
- no bank commissions.
The borrower will have to draw up an insurance contract both for the collateral and for his own life and ability to work.
Who can apply?
There are certain conditions for obtaining a preferential mortgage. They relate mostly to 3 factors:
- recipient;
- housing purchased with borrowed funds;
- issued mortgage.
Compliance with these requirements together allows you to qualify for a reduced mortgage interest rate.
Borrower's portrait
This format of benefits appeared quite recently - in 2020. During this time, about 4,500 families managed to take advantage of the preference. In terms of the country, these are not such large indicators, so it was decided to simplify the conditions for participation in the program. Thus, families in which:
- the parent applying for the loan and the children taken into account in the program are Russian citizens;
- the second or subsequent children were born between 01/01/2018 and 12/31/2022.
After the changes regarding the mortgage term came into force, the number of children in the family ceased to matter. Thus, at the birth of the 2nd and 5th children, different families will receive the same preference - a reduction in the interest rate to 6% per annum for the entire term of the loan.
Banks have their own requirements for potential borrowers. They usually relate to the following factors:
- age;
- citizenship;
- experience;
- availability of work;
- income level.
It is quite logical that banks want to see reliable and solvent citizens among their borrowers. To increase the likelihood of approval, most financial institutions offer to attract co-borrowers. For this type of mortgage, they can be not only the parents of children (for example, the borrower is the father, and the co-borrower is the mother), but also other citizens. The only requirement for them is Russian citizenship.
Housing requirements
A family can become a participant in the program if it has become the owner of one of the following types of real estate through a mortgage loan:
- apartment;
- the house together with the plot on which it is located.
Additionally, conditions are imposed on the purchase and sale transaction itself. Thus, housing must be purchased on the primary market. Moreover, it is not necessary to buy an apartment under a shared participation agreement. For example, you can formalize the deal after the house has been delivered under a simple purchase and sale agreement.
Additionally, banks have their own requirements for purchased housing. As a rule, they relate to the presence of various communications, the stage of construction, and the developer.
The purchase agreement itself must be executed before the end of the program, i.e. before December 31, 2022. However, for families whose child is born after July 1, 2022, there will be a delay until March 1, 2023.
Mortgage requirements
The law does not limit which bank to apply for an interest rate reduction. Moreover, preferences can be used in relation to:
- a new housing loan (i.e. the mortgage is immediately issued at 6% per annum);
- refinanced loan.
It is noteworthy that starting from 2020, you can receive a reduced interest rate even on a refinanced mortgage, but provided that the purpose of issuing the money does not change. This is especially true for those families who have already taken out a preferential mortgage, but assigned it according to the old rules for several years. Then they can refinance the mortgage and receive a 6% rate for the entire loan period.
Registration of housing using the state program
The state housing mortgage program represents one of the types of loan offers aimed at improving housing for low-income citizens who are classified as under-income.
Purpose of the program
Important! The main directions of the state mortgage program: specialists, young families, public sector employees, scientists.
Under this program, the state allocates financial resources to banks to provide services to the population in providing real estate loans on privileged terms.
Many Russian banks have joined the program, whose task under the project is to reduce the financial burden on borrowers participating in mortgage lending.
As a result of joint actions of the government and credit institutions, updated credit programs were created that reduce the cost of mortgages for borrowers by up to 35% using funds allocated from a special fund.
Preferential mortgage funds are allocated for specific types of real estate. In particular, this means that only the purchase of apartments in new buildings or the use of funds for housing construction is provided.
Real estate from the secondary housing market and houses from the private sector are not eligible for this program. The subsidy is issued subject to the following conditions: in a family, for each person, the area norm should be 18 square meters. m.
Advantages of a mortgage with government assistance
When getting acquainted with the program, you should pay attention to studying the terms of the loan. In particular, it is necessary to evaluate the advantages and disadvantages of this project.
The advantages of obtaining state mortgage lending are:
- reduced interest rate;
- no additional commissions;
- possibility of early repayment of the loan without penalties;
- the right to use funds from maternity capital to repay part of the debt.
The main advantage of this program is that real estate is purchased from reliable developers. Since you can only purchase an apartment from construction companies trusted by the state.
The main disadvantages of the program design:
- a significant amount of the down payment (20%);
- narrow selection of purchased real estate;
- limited number of banks participating in the project;
- high rates for houses at the initial stage of construction.
The purchased housing is pledged to the bank. Therefore, the possibility of complete and free disposal of property before repayment of the loan is excluded.
Lending terms
When applying for a mortgage, citizens first of all look at the current interest rate. If state support is used, it is set at 6% for all participants, regardless of which bank the applicants applied to. Other conditions are determined mainly from the wishes and capabilities of the client. This applies to the terms of the loan, the size of the down payment, and the amount of the monthly payment. However, the program has its own limitations regarding:
- The size of the down payment. Applicants must contribute at least 20% of the cost of housing themselves (by the way, for these needs you can use not only your own funds, but also those received under other government programs, for example, from maternity capital funds, but they have their own restrictions and will have to apply to the Pension Fund for approval);
- Maximum loan amount. Please note that we are talking specifically about the amount of borrowed funds, and not the cost of housing, i.e. an apartment or house may cost more than the established limit. Moreover, the restriction depends on the location of the residential property itself. If we are talking about an apartment or a house located in Moscow, St. Petersburg, the Moscow or Leningrad region, then the loan size should not exceed 12 million rubles. For housing loans in other regions, the limit has been reduced by 2 times, i.e., it is 6 million rubles.
When calculating the maximum loan size, the family’s own funds are not taken into account, but if we are talking about maternal capital, then it is included in the maximum allowable amount.
For example , the Bezverkhov family wants to buy an apartment in Kazan for 7.5 million rubles. How much of their own money must they contribute to participate in the program, assuming they have a maternity certificate? When calculating the loan, matkapital is included in the maximum amount, i.e. 6 million rubles. Consequently, Bezverkhov himself will have to save up: 7.5 – 6 = 1.5 million rubles.
Federal program "Housing"
Along with specific banking promotions, there are also federal programs that specifically help certain categories of citizens purchase an apartment (or other real estate). Almost always we are talking not about full, but about partial compensation of acquisition costs.
Currently there is one similar program called “Housing”. It has been extended until December 31, 2020, so at the moment almost everyone has a chance to be covered by it. The program will begin in 2020; the total amount of funding for all years will be about 692 billion rubles. The main direction within this program, which can cover a fairly large circle of citizens, is the “Young Family” campaign.
The essence of the program is that the state subsidizes a certain percentage of the cost of housing (minimum 30%). To take part in it, you need to meet three requirements simultaneously:
- One or both spouses are not older than 35 years of age (support for a single parent with one or more children is allowed).
- Local authorities recognized the family as in need of improved living conditions (for example, low-income, large families, living in emergency housing, etc.).
- Availability of a confirmed, stable income that will allow you to fulfill loan obligations if a loan with government support is approved.
Relevant documents must be collected individually. You must check the complete package of documents on the website of the Administration of your locality or in person with representatives of the authority. As a rule, the set of documents is standard:
- passports of spouses;
- marriage certificate (if the family is full);
- birth certificate of all children (even if they are already 18 years old);
- certificate of ownership of existing housing;
- extract from the Unified State Register for the apartment;
- extract from the house register;
- certificate of family composition.
If citizens wish to use government assistance to build a house, they additionally provide documents for the land plot:
- certificate of ownership;
- cadastral passport;
- permission to create a structure (issued by the local Administration);
- inspection report by representatives of the Administration (you need to confirm that the house is at least 30% ready).
NOTE. Participation in this type of mortgage is possible only if the family has not previously used government subsidies (with the exception of maternity capital funds).
In this case, the decision to issue a subsidy is made by the Administration. After this, citizens interact with any bank through which they would like to obtain a mortgage loan. The further procedure is approximately the same as in other cases.
The video commentary below provides information for 2020, but there have been no changes compared to the current moment.
Where to apply?
Mortgage with state support is essentially one of the mortgage lending programs of Russian banks, which involves subsidizing the rate by the state. To apply for such a loan, the applicant can contact:
- AHML "House of the Russian Federation";
- credit institution.
If you decide to contact a bank, remember that subsidies for compensation for state mortgages are not provided to all credit institutions. There is a certain list where banks and the amount of subsidies for them are indicated. Therefore, we advise you to check with your chosen bank about the availability of the appropriate program in advance. The list of credit institutions where you can get a mortgage with state support includes:
- Sberbank;
- VTB;
- Absolut Bank;
- Rosselkhozbank;
- FC "Otkritie";
- Promsvyazbank;
- Raiffeisenbank.
In total, the list currently includes 47 organizations. And the amount of subsidizing the difference between the percentages varies from 320 to 171,205 million rubles. Maximum amounts are set for such large banks as Sberbank, VTB, Gazprombank.
Read: How to write off your mortgage when you have a baby in 2020
What are the disadvantages of preferential mortgages?
There are not many of them, but you need to write and know about them:
- You can only buy housing in a new building.
- The seller is only a legal entity.
- The cash limit is limited depending on the region.
- The program is short-term, you must submit your application before November 1 of the current year.
Also, many borrowers note one more nuance - a rate of up to 6.5% per annum is valid only if you agree to personal insurance. If you refuse it, your percentage may increase by 1-2 percentage points, and all the benefits from such a mortgage will disappear, it will be equal to standard programs.
