Who can get an interest-free mortgage: list of banks, preferential terms without interest

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October 11, 2020 One comment

Is it possible to get an interest-free mortgage in 2020, what is it? How to purchase an apartment with a mortgage without overpaying interest and using assistance from the state.

Not every citizen can currently afford to buy housing in our country.

With the introduction of mortgage loans from non-state banks, buying a home has become more affordable, but not for everyone.

Some categories of the population, for example, young families, are entitled to receive assistance from the budget, which is benefits for the purchase of an apartment.

However, is there now an interest-free mortgage and how to apply for it?

Definition

Interest-free mortgage is a loan for the purpose of purchasing living space with partial reimbursement of funds.

With the help of government assistance measures, certain groups of the population can receive preferential conditions, including subsidies for the purchase of housing.

The loan amount is paid in part from the federal or regional budget.

It turns out that such categories of citizens will not need to pay a fee for using credit funds. This mortgage product is called an interest-free mortgage.

The Government of the Russian Federation has developed separate social programs for Russian families.

In accordance with preferential programs, it is possible to receive 1 of 3 types of state support:

The type of support will depend on which program beneficiaries participate in. As a rule, you can get up to 1/3 of the price of the apartment from your budget.

What can be used to pay the down payment on a mortgage.

This is topical for citizens who want to take out a mortgage loan, but do not have the required 15% of the property price.

The entire mortgage cannot be interest-free. Such loans are unprofitable for banks. Banks pursue profit in their activities, so they will not agree to provide this kind of installment plan.

Purpose of receipt

An interest-free loan for the purchase of real estate is aimed at helping young families who need their own roof over their heads due to its absence or extremely cramped conditions.

Despite the fact that the secondary housing market is saturated with various offers, including rentals, such expenses are unjustified and expensive for the family budget. This forces young people to look for other solutions, and government programs are not the least important. Therefore, you should find out how to get an interest-free home loan.

In the current year 2020, the “Young Family” program is in effect. As part of its implementation, it is envisaged to provide a loan at 0% for the purchase of square meters in apartment buildings, and its repayment will stretch over several decades. This program also covers single-parent families.

Mortgage loans are provided through several banks, including Sberbank and Gazprombank. A special feature of drawing up an agreement to provide funds in 2020 is that there is no requirement to make an initial contribution as a condition. Support is also financially possible for families without children, but it is limited.

Interest-free loan intended for families in need

Thus, the state is ready to provide childless couples with a subsidy of up to 30% of the price of the apartment. If there is one child, then the subsidy will amount to 35% of the cost of living space. Large families can count on 40%. Clients have the right to spend the subsidy on the down payment and on repaying interest on the loan, which actually makes the mortgage interest-free. The loan can be repaid by directing maternity capital funds or funds allocated under other social programs.

Categories of beneficiaries

Currently, preferential mortgages are available to a wide range of persons who belong to any category of beneficiaries:

• young families (spouses are no older than 35 years old);
• families who gave birth (adopted) 3 or more children;
• pensioners;
• single mothers (single fathers);
• young professionals (teachers, doctors, etc.);
• employees of budgetary institutions.

To be included in any of these groups of beneficiaries, you must meet 2 most important conditions:

To exercise your right to receive government support, you must submit a set of documents, wait to be placed on the queue and wait for some time.

How to take

There are many ways to obtain such loans. There are many government programs to support certain categories of the population, within which you can get the necessary amount of money for certain purposes without charging interest for using the loan. Let's look at some of them.

For large families in 2020

Paragraph e) of the Decree of the President of the Russian Federation dated May 5, 1992 N 431 “On measures for social support of large families” (as amended and supplemented) dated February 25, 2003, provides for assistance in issuing interest-free loans to large families in 2019.

In order to exercise your rights, you must obtain a certificate for a mother of many children, as well as a certificate of entitlement to benefits. Such documents are issued by social protection authorities located in the region of residence of a large family.

If, according to Decree of the Government of the Russian Federation No. 152 of February 22, 2000, the average income per family member does not exceed the subsistence level established for a given period of time, then such a family has the right to an interest-free loan.

It can be used:

• for housing construction;
• to buy an apartment;
• to improve living conditions (for example, to insulate the house).

Expenses for reimbursement of funds are made from the federal budget or the budgets of the Russian Federation in the manner prescribed by law. It should be borne in mind that due to possible changes in the income or composition of a large family, documents for the right to receive benefits should be updated annually.

Video: Mortgages for families with many children. News. GuberniaTV.

for housing

Any organization can issue an issue to its employee, on the basis of Art. 807 of the Civil Code of the Russian Federation, interest-free loan for the purchase of housing. Moreover, the return of funds will be carried out at the expense of maternity capital funds.

Requirements

Obtaining an interest-free mortgage has some features. They relate mainly to the conditions of its issuance.

Let's analyze the key requirements for borrowers:

Other conditions for receipt are established by the credit institution. These include:

Preferential categories of citizens

1. Large families. Each such family must have three or more children born or adopted.
2. Parents raising a child alone. Mothers or fathers with a minimum income and having a dependent child can apply for assistance from the state.
3. Families in which the spouses are under 35 years of age. The state has developed several assistance options for young families. Each family decides which one to use independently.
4. People of retirement age.
5. Young specialists. The state supports beginning craftsmen who come to work in government agencies after graduating from educational institutions. Most often, this category includes doctors, teachers and some other employees needed in rural areas.
6. Employees of budgetary organizations.

How to get an interest-free mortgage

Thus, it becomes clear that, as such, interest-free mortgages in their pure form do not exist.

However, certain groups of the population have the right to receive a mortgage on preferential terms.

To do this, you will need to collect the necessary documents, as well as wait for your turn to receive a subsidy.

Budget funds will be used to repay part of the loan, thereby making the purchase of real estate more feasible.

For single parents

Some time ago, single mothers or fathers had good benefits.

But today the Russian government does not include single parents raising children without a spouse as a separate group of citizens who are entitled to benefits.

As a result, single mothers are not entitled to an interest-free mortgage.

But they have the opportunity to participate in other programs, for example, those for young families.

In this case, there is a most important condition, namely not reaching the age of 35 years.

However, in some regions of Russia, single parents are entitled to support from municipal authorities.

The subject's bodies provide certificates to single mothers who are raising children without a father.

Using the certificate, you can buy housing with benefits or pay part of the mortgage loan to the lending bank.

Receiving a document does not deprive a single mother of her right to participate in other social benefit programs.

It can be difficult for single mothers to get a mortgage because their income level is often lower than required.

In order for the bank to approve the application, you will need to pledge existing property or ask one of your relatives to guarantee for the borrower.

A single mother can also participate in a program designed for young families.

Young family

To participate in the Young Family program, you must meet several requirements:

To participate in this program you will need to contact your local administration and be on a waiting list.

Young families are provided with a subsidy for the purchase of housing, the amount of which is calculated based on the number of children.

If there is one child in the family, then 30% of the apartment price is due. If you have two children, you are entitled to a subsidy of 35% of the cost of the property.

The advantage of this program is the small amount of the down payment, 10% of the housing price.

Maternity capital or a subsidy can be used to pay the down payment.

The program has its own nuances that you should be aware of before applying for participation in the program:

The length of time you wait in line will depend on many factors. Preference is given to families with children. However, they too can wait for their turn for many years.

Preferential mortgages for doctors, read here.

Large families

Special preferential conditions have been established for large families, but they do not include assistance in purchasing housing.

After the birth of the 3rd child, a plot of land is allocated. In addition, benefits from the regional budget are provided for improving living conditions. No other benefits have been established.

However, large families can also participate in the “young family” program if the spouses have not reached 35 years of age.

You can get on the waiting list for the program if future borrowers have sufficient income to pay off the remaining mortgage loan debt.

For young professionals

Young specialists are recognized as those who have recently graduated from higher educational institutions and have worked in government institutions in their specialty for more than three years, and have not reached the age of 30.

They have the right to participate in the program and receive a subsidy, which pays part of the cost of the apartment (payment of the down payment or interest).

Employees of the following positions can participate in the program:

1. Teachers.
2. Doctors.
3. Employees of institutes, research centers.
4. Employees of scientific institutions, etc.

State employees

Public sector workers are considered a separate group and have the right to participate in the social program.

Conditions of participation for public sector employees:

Public sector employees are recognized as workers in the field of healthcare, social services, culture, and science. Teachers are placed in a separate group.

Interest-free mortgage: what is it, its types

A mortgage loan is a large financial burden for the borrower. Not everyone can afford large monthly payments and a down payment. To help citizens purchase housing, the state regularly conducts support programs for privileged categories of the population: pensioners, young and large families, and public sector workers.

An interest-free mortgage for a large family may differ from the program for state employees. For this reason, it is necessary to clarify the terms of lending with the administration authorities.

Before you take out an interest-free mortgage, you need to find out what programs are offered. Some of them may operate at the regional level. Preferential lending can have several varieties:

• Subsidy. This is a lump sum payment that is used as a down payment. The state allocates an amount ranging from 30 to 50% of the cost of housing. This money is transferred to the bank account. Interest is considered repaid, and the borrower returns the principal.
• Decrease in interest rate. Not all categories of the population can get a loan without interest. For example, interest-free mortgages for public sector employees are currently developed only for military personnel under a special system. There are separate programs for teachers at a reduced percentage.
• Preferential prices for real estate. This option does not apply to an interest-free mortgage at all, but it is a benefit option. Housing in new buildings is sold at a price significantly lower than market prices.

Various benefit programs have been developed to support young families, professionals, etc. These may change over time, so those wishing to participate in these programs should check their terms and conditions.

Only banks with a share of government support engage in this type of lending. Some financial institutions themselves develop programs and reduce the interest rate to attract customers.

Receipt stages

You can take part in a preferential subsidy program if you need to improve your living conditions, as well as if you have a sufficient level of income to repay the debt.

First of all, you will need to contact your local administration and collect a set of documents necessary for participation.

After this, you will need to wait for the paperwork to be reviewed by the local government, usually about 30 days. Then a decision is made to place the applicant on the waiting list.

Participants receive a certificate stating that they are in the queue.

The applicant is notified of the moment when the turn has arrived either by mail or by telephone.

After the turn comes, participants receive a certificate that certifies the right to receive a government subsidy.

The certificate will be required to be presented at the bank where the loan is issued.

Conditions for obtaining a mortgage

To get borrowed funds to purchase an apartment, you need:

• correspond to the preferential status under which the loan is issued;
• have an income that allows you to pay a mortgage (the total amount of monthly expenses should not exceed 60% of income);
• have all the necessary documents.

The terms of the mortgage you receive depend on the specific program in which the borrower participates. Depending on it, it is necessary:

• have 3 or more children;
• be under 35 years of age;
• be over 60 years of age;
• have official employment in a state or municipal institution with work experience of at least 3 years;
• need improved living conditions.

Algorithm of actions for obtaining a housing loan on preferential terms:

1. Contacting local authorities. Most programs provide different conditions, depending on the region. Therefore, you should clarify the requirements and list of required documents at the local level.
2. Collect a package of documents. When receiving a preferential mortgage, it is higher than with standard lending.
3. Obtaining a certificate of participation in the relevant program. It contains information about what benefits its owner can count on.
4. Contacting the bank and submitting an application with the necessary documents attached.
5. Choosing a living space after receiving a positive decision. This takes 2-3 months, depending on the policy of a particular bank.
6. To have a deal. The last stage is the signing of the contract, after which the living space becomes the property of the borrower, but remains in bank collateral until the debt is fully repaid.

Then all that remains is to pay the loan regularly, avoiding delays. In case of failure to fulfill loan obligations, the bank has the right to confiscate the collateral.

Required documents

To participate in the program you will need to collect a set of the following documents:

From this list, participants should collect the documents necessary to participate in a particular program.

Then you can submit all documents to the bank.

To apply you will need:

• passport;
• employment history;
• income certificate in form 2-NDFL;
• other document.

Interest-free mortgage from Russian Railways

Young professionals, as well as pensioners who were or are in the structure of the Russian Railways company, have special benefits when registering and purchasing real estate. Support is provided exclusively to company employees , and not to every interested Russian citizen. Don't confuse this!

Russian Railways OJSC cooperates with VTB24 Bank, and therefore in the branches of this financial institution it is possible to draw up a mortgage agreement with special subsidies. The benefit is that the employer himself will directly compensate for 7.5% of the monthly overpayment of payments. This is the standard rate for all employees of Russian Railways.

If the application is filled out by a young specialist under 30 years old or employees with many children, then in such cases the company’s benefit will cover 8.5% of loan payments. Then, when choosing certain bank mortgage programs, the loan will be either interest-free or with a minimum monthly overpayment.

The question of how to get a mortgage without interest has been asked by many Russians. And it is obvious that this is a completely achievable goal, taking into account the many social programs that are provided today. Not only the state, but also a number of major companies offer profitable subsidies for mortgage agreements in order to make the purchase of real estate more affordable.

Application Form

In your application to the local authority to receive a subsidy, you must indicate the following::

The information provided in the application is the same regardless of the type of program.

But when participating in a program for young families, it is necessary to provide information on all children.

Read here what to do with a mortgage when spouses divorce in 2020.

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Federal Target Program “Young Family”

As you know, back in 2007 the issue of organizing mortgage lending with interest subsidies was raised. It was planned that for a young family that participates in the social mortgage program, 25% of the total loan amount would be written off at the birth of the first child, 50% at the birth of the second, and the entire amount of the loan funds at the birth of the third.

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However, this initiative did not find approval among deputies and a new program was proposed: “Affordable housing for young families,” which has been in effect since 2011 to the present day with minor changes. Its goal is to provide needy families with cash grants that will help them purchase housing.

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The payment amount will be from 30 to 35% of the cost of housing, depending on the region of residence of the family and the presence of children. You can receive financial assistance on a first-come, first-served basis, which is compiled by the city administration of the district or city of your residence. Please note that to do this you must be recognized as in need of improved living conditions!

Most often, this can be achieved if the family does not have their own home, if each family member has less than 18 square meters, or if the apartment/house is in disrepair and is subject to demolition.

One Comment.

1. CreditGid.Info

   02:59 17.11.2018

   I don't understand a little. We are currently in the process of obtaining a mortgage. We expect the birth of our second child in June 2020. What would be the best way to do this? Should I get a mortgage already in 1918 or should I stop applying for a mortgage altogether? Will the state refinance the existing mortgage or will it be necessary to apply for it after the birth of the second child with all the relevant documents?

   Answer