The Russian government will expand the conditions for Far Eastern and Arctic mortgages. This instruction was given to the Cabinet of Ministers by the President of the country Vladimir Putin following a working trip to the Arkhangelsk region in December 2023.
In particular, the preferential program is planned to be extended to participants in a special military operation and family members of soldiers killed during the SVO. Moreover, banks will be required to issue such loans without restrictions on age and marital status.
“This is our sacred duty. You and I are sitting here, solving difficult issues, necessary ones, but we are still warm, you know, and safe, and the guys are there, on the front line, and in the mud, and under bullets, and under shells. We must never forget about this. Both they and their family members, of course, should always be in the field of our attention,” Putin said at a meeting on the development of support settlements in the Arctic zone on December 11.
In addition, the head of state instructed to cancel the requirement to have work experience in their specialty for employees of educational and medical institutions when receiving Far Eastern and Arctic mortgages. Moreover, the maximum amount of a preferential loan under the program will be increased from 6 million to 9 million rubles when purchasing housing on the secondary market or a finished house with a land plot of more than 60 square meters. m in single-industry towns.
The Cabinet of Ministers will have to fulfill the order of the Russian leader by March 1, 2024. This is stated in a message on the Kremlin website.
kremlin.ru
According to the current terms of the program, until the end of 2030, young families where both spouses are not older than 35 years, as well as employees of medical and educational organizations in the Far Eastern Federal District and the Arctic zone of Russia can obtain a housing loan at 2% per annum. This is more than eight times lower than the current market mortgage rate (almost 17%), according to data from the DOM.RF company.
“Borrowers can apply for a loan in the amount of up to 6 million rubles with a down payment of 20% of the cost of housing... The loan size can be increased to 9 million rubles in the case of construction or purchase of housing on the primary market with an area of more than 60 square meters. m,” says the organization’s materials.
Vladimir Putin’s decision to extend Arctic and Far Eastern mortgages to SVO participants and family members of the deceased will be a significant measure of support for Russian military personnel and will lead to an increase in demand for preferential loans. Vice President of the International Academy of Mortgage and Real Estate Irina Radchenko told RT about this.
“Thanks to this measure, the volume of Far Eastern and Arctic mortgages should increase significantly. It is no secret that quite a lot of men from the Far Eastern Federal District and the Arctic regions go to the Northern Military District zone to serve under a contract, so for participants in a special operation from there such an offer is very relevant. Moreover, fighters, in principle, receive quite high pay, so they can form the initial capital to buy an apartment,” Radchenko noted.
In general, in her opinion, the initiative will make preferential mortgages for military personnel more accessible, will help them solve the housing problem more quickly and will become one of the additional incentives to serve under a contract. A similar point of view was expressed in a conversation with RT by the vice-president of the Russian Guild of Realtors, Konstantin Aprelev.
“The interest rate on Far Eastern and Arctic mortgages is now the lowest among all targeted housing lending programs. Extending the initiative to SBO participants is great, since such measures will significantly expand the number of its recipients. At the same time, such a mortgage can be issued for secondary housing, and not just for primary housing, which expands the choice for consumers,” added Aprelev.
In turn, experts largely associate the increase in the credit limit for Far Eastern and Arctic mortgages with a noticeable increase in the cost of housing in these territories over the past few years. So, for example, according to the Federal Statistics Service, if at the end of 2019 the cost per square meter in the primary and secondary housing markets in the Far Eastern Federal District was 69.6 thousand and 70.7 thousand rubles, respectively, then at the end of September 2023 the amount increased to 137.2 thousand and 114.5 thousand rubles.
“The Far Eastern mortgage has been in effect for quite a long time. During this time, housing prices increased significantly throughout the country, and the Far Eastern Federal District, together with the Arctic zone, was no exception. It is important that the limit of 9 million rubles is intended for apartments with a total area of more than 60 square meters. m. Such standards were made in order not to drive up prices for one-room and two-room apartments, the cost of which is already growing rapidly,” noted Irina Radchenko.