Putin Announces Improvements in Housing Conditions Through Preferential Mortgages
On December 23, 2024, Russian President Vladimir Putin highlighted the positive impact of preferential mortgage programs on housing conditions for hundreds of thousands of families. During a meeting focused on economic issues, he emphasized the need for the government to refine these credit programs and ensure their effectiveness, especially in light of high key interest rates. Putin stated, "We need to conduct appropriate information work so that both citizens and entrepreneurs know about such programs, their volumes, the conditions for receiving such support and the timeframes."
Currently, preferential loans constitute 16% of the total banking portfolio, amounting to over 17 trillion rubles, with approximately 10 trillion rubles allocated to subsidized housing loans. Putin noted that the results of these initiatives are evident, as they have contributed to record levels of housing commissioning in the country.
Overview of Current Preferential Mortgage Programs
Russia offers several preferential mortgage programs aimed at different demographics. Young families, where both spouses are under 35, as well as participants of the Special Military Operation (SVO) and employees in specific sectors, can access loans at a remarkably low interest rate of 2% per annum. The maximum loan amount is 9 million rubles, with a minimum down payment of 20%.
Additionally, IT professionals can obtain mortgages at 6% per annum, provided they meet certain income thresholds. The most popular option remains the family mortgage at 6% for families with children, which is available for purchasing new housing across various regions.
Challenges in Accessing Low-Interest Loans
Despite the availability of these programs, many Russians have faced challenges in securing low-interest housing loans, as banks have increasingly refused applications due to exhausted limits. This issue was raised during a direct line with Putin, who described the situation as an "outrage" and pledged to investigate the matter. He assured citizens that there would be no limits on the issuance of these loans.
To address these concerns, the government has implemented a new mechanism for family mortgages, which allows for a common limit on funds rather than distributing them among banks. This change aims to streamline the process and ensure that banks can issue loans without delays.
Future of Preferential Mortgage Programs
Prime Minister Mikhail Mishustin announced that the government is working on eliminating the limit mechanism entirely, allowing banks to issue an additional 2.5 trillion rubles in preferential loans. The Ministry of Finance has confirmed that the issuance of these loans has not been suspended in any bank, and further changes to the program rules will be made to avoid future restrictions. Elman Mekhtiev, founder of the Kredchek service, noted that the leadership's commitment to resolving these issues means that planning will now focus on actual needs rather than available funds.
