Putin Proposes Expansion of Family Mortgage Program in Russia
In a recent meeting of the State Council focused on family support, President Vladimir Putin emphasized the need to preserve and expand the preferential mortgage program for families with children. This initiative, which allows families to secure loans at a significantly reduced interest rate of 6%, was originally launched in 2018 and has since aided 1.3 million families in improving their housing conditions. Putin's proposal includes allowing families to purchase housing on the secondary market, a move aimed at increasing housing availability in areas where new construction is limited.
Putin highlighted that the new terms should only apply in populated areas where there is minimal new housing development, ensuring that the expansion does not negatively impact the construction industry. He called for the government to establish clear criteria for these areas to prevent any potential manipulation of the program. The current family mortgage program allows loans for properties valued up to 12 million rubles in major cities like Moscow and St. Petersburg, and up to 6 million rubles in other regions, with a minimum down payment of 20%.
Addressing Challenges in the Mortgage System
Despite the benefits of the family mortgage program, recent concerns have arisen regarding the accessibility of these loans. Many families have reported difficulties in obtaining loans due to banks exhausting their allocated limits for issuing preferential mortgages. Putin expressed his outrage over this situation, emphasizing that banks should find it advantageous to offer loans at the subsidized rate, with the government compensating the difference. He assured that he would investigate the issue further.
To address these challenges, new rules for issuing family mortgages were implemented on December 15, which aim to eliminate the limit distribution among banks. Instead, funds will be allocated automatically, ensuring that all banks can issue loans without interruption. The Ministry of Finance is also preparing amendments to completely remove the limit mechanism from the program, which is expected to enhance the efficiency and accessibility of family mortgages for Russian families.
