Subsidized mortgage for families with children

Features of state-supported mortgages for families with children in Russia

The very name of the family mortgage implies that only those raising two or more children can receive the subsidy. Furthermore, the second or subsequent child must be born between January 1, 2018 and December 31, 2022. The interest rate for such a mortgage will be 6% per annum, and the down payment will be 15% or 20% of the total housing cost.

Families with one child also have the right to participate in the program, but only if the child has been granted a disability status. In this case, the loan terms will differ slightly — the interest rate will be 4.7% per annum instead of 6%.

Requirements for borrowers and co-borrowers

Only one of the parents can act as the mortgage borrower. Moreover, some banks insist on having a co-borrower — a spouse, unless the property is divided by a prenuptial agreement.

Requirements for borrowers and co-borrowers may vary depending on the bank the applicant applies to. Basically, they look as follows:

• borrower and co-borrower age between 21 and 75 years old;
• hold citizenship of the Russian Federation;
• permanent registration in the region where the bank branch is located;
• continuous work experience at the last job of at least 3 months;
• positive credit history.

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What housing is covered by the subsidized mortgage

Mortgage lending does not apply to all types of real estate — secondary housing cannot be the object. Thus, the subsidized rate applies to new construction, specifically:

• apartments, including those that are part of townhouses;
• residential houses;
• part of a residential house;
• residential real estate together with the land plot on which it is located;
• house construction.

Lending terms for residents of the Far East

More benefits are provided for residents of the Far Eastern Federal District than for all other borrowers. In particular, for them, the family mortgage applies not only to the primary market, but also to the purchase of secondary housing if it is located in a rural area. In addition, if a child in the family was born between January 1, 2019 and December 31, 2022, and the loan agreement was concluded starting from March 1, 2019, the interest rate on it will be only 5% per annum.

Mortgage for families with disabled children

In addition to the main program, there is a lending program aimed at families with a disabled child. The rate on it is lower than for the "Family" mortgage and is 4.7% per annum.

All families in which a child was born between January 1, 2018 and December 31, 2022 and was assigned a "disabled" category can take part in the program. At the same time, its validity period may differ:

• until March 1, 2023, if the child was assigned a disability status before December 31, 2022;
• until December 31, 2027, if the disability is established after the specified date.

As in the previous case, the object of lending can only be either housing under construction or real estate on the primary market.

Procedure for applying for a family mortgage

Since not all credit institutions participate in the state support program, before submitting a mortgage application, check whether it is possible to take a subsidized mortgage at the chosen bank. After that, the procedure will be similar to regular mortgage lending:

1. First of all, the borrower needs to choose a property. Since the apartment must belong to the primary real estate market, look into new developments.
2. Next, contact the bank that has accredited the developer.
3. When applying, specify that you are applying specifically for the family mortgage program, as the list of documents in this case will differ from a standard mortgage.
4. Get preliminary loan approval.
5. Conclude the transaction.

Answering frequent questions

Family mortgage with state support is a relatively new measure and therefore raises many questions. Today we will try to answer the most popular ones.

What is the maximum loan amount under the Family Mortgage program?

For residents of Moscow, St. Petersburg, Moscow and Leningrad regions, the maximum limit is 12 million RUB, and for other regions of Russia, the loan amount cannot exceed 6 million RUB.

Can you get a mortgage with state support at all banks?

No, out of all active banks in Russia, only 50 participate in the preferential program. The largest of them are Sberbank, VTB, Rosselkhozbank, Promsvyazbank, Uralsib, Gazprombank. The full list of financial organizations can be found on the website of the Ministry of Finance of the Russian Federation.

Can maternity capital be used when taking out a subsidized mortgage?

Yes, just like with any other mortgage. The program terms allow using the maternity certificate as a down payment. It is also possible to pay off the mortgage using funds from the certificate.

Until what date will the preferential program run?

Upon the birth of a second or subsequent child, you can use the program until March 1, 2023. In the event that a child was diagnosed with a disability after December 31, 2022, the validity period is extended until the end of 2027.

Does the rate change during the entire loan term?

No, the interest rate remains stable throughout the entire loan term. But a mandatory condition for maintaining it is taking out and annually renewing insurance.

Is it possible to refinance an existing mortgage at a preferential rate?

Yes, the option to refinance became available in April 2019. You can change the interest rate to a preferential one for any mortgage, even if the family has previously changed the terms of the agreement, for example, due to the birth of a child.

Is it mandatory to take out insurance with the same bank where the targeted loan was issued?

No, you take out insurance not with the bank, but with an insurance company. And the terms of the loan agreement do not require taking out an insurance policy with a specific insurer. You can choose a company yourself based on your own preferences.

What documents are required to apply for a subsidized mortgage?

Applying for a subsidized mortgage is little different from any other mortgage lending, so the list of documents will be almost identical:

• the loan application itself;
• borrower's passport;
• A INSURANCE NUMBER (SNILS);
• A TAX ID (INN);
• certified copy of the work book or employment contract;
• 2-NDFL income statement to confirm income;
• children's birth certificates;
• military ID, if the applicant is a male.

If the loan agreement provides for a co-borrower, the same documents will be required from them, with the exception of children's birth certificates.

Can you use a subsidized mortgage if one of the children is already of legal age?

Yes, the law does not specify that all children in the family must be minors. The only condition for obtaining a mortgage loan: at least one of the children must be born after January 1, 2018.

Can you get a subsidized mortgage if the children are from different marriages?

Yes, the common parent of these children can apply for preferential mortgage lending. And it does not matter whether they were born in the same marriage or different ones.

Which banks participate in the preferential mortgage lending program for families with children?

As we mentioned above, far from every Russian bank participates in the preferential mortgage lending program. Today there are not many such organizations. At the same time, lending terms and the list of required documents may vary depending on the chosen institution. Therefore, we have prepared a list of banks where you can apply for a subsidized mortgage in 2021.

• PJSC SberBank;
• VTB Bank (PJSC);
• JSC Absolut Bank (PJSC);
• JSC Bank DOM.RF;
• GPB Bank (JSC);
• Russian Agricultural Bank, JSC;
• Promsvyazbank, PJSC;
• Bank FC Otkritie, PJSC;
• MOSCOW CREDIT BANK, PJSC;
• Raiffeisenbank, JSC;
• Bank Vozrozhdenie, PJSC;
• AB ROSSIYA, JSC;
• Sovcombank, PJSC;
• Rosbank, PJSC;
• TKB BANK, PJSC;
• AK BARS BANK, PJSC;
• Investtradebank, JSC;
• Zapsibkombank, PJSC;
• BANK URALSIB, PJSC;
• Center-invest Bank, PJSC;
• UniCredit Bank, JSC;
• KOSHELEV-BANK, JSC;
• Metallinvestbank, PJSC;
• Bank Snezhinsky, JSC;
• Kuban Credit Bank, LLC;
• Prio-Vneshtorgbank, PJSC;
• RNKB Bank, PJSC;
• SMP Bank, JSC;
• Aktiv Bank, JSC;
• BANK ORENBURG, JSC;
• Bank Zenit, PJSC;
• Bank Avers, LLC;
• Expobank, LLC;
• Bank Saint Petersburg, PJSC;
• NIKO-BANK, PJSC;
• Far Eastern Bank, JSC;
• SNGB BANK, JSC;
• Ural FD Bank, JSC;
• SGB BANK, JSC;
• MinBank, PJSC;
• Energobank, JSC;
• Kuznetsky Bank, PJSC;
• VBRR Bank, JSC;
• DOM.RF, JSC;
• ZHIVAGO BANK, LLC;
• KS BANK, JSC;
• KUB Bank (JSC).