Maternity capital and military mortgage - can they be used together?

Usage

Maternity capital with a military mortgage can be used in two directions:

• early repayment of an existing loan;
• making a down payment for an apartment. There are two options here: funds from maternal capital can be used to increase the amount of the loan issued or to partially repay the cost of real estate under the purchase and sale agreement.

In the second case, you need to obtain permission from the Pension Fund (matkapital) and from Rosvoenipoteka.

Housing for military personnel

Material support for employees is provided by the state in various directions. The most pressing issue for the population was and remains the housing issue. To provide the military with housing, there is a special savings and mortgage system - NIS. People simply call it a military mortgage or a military mortgage.

Important! NIS participants can get their own living space in two ways. The first option is to create a personal savings fund. The second is to apply for a mortgage loan.

If the recipient decides to gradually increase resources to purchase an apartment, then a personal account is opened in his name. Every year the authorities determine the amount of payment. These amounts are subject to regular indexation. For additional protection against inflation, the money is transferred to trust management. This allows you to later receive a profit in the form of interest for using the funds.

It will not be possible to acquire real estate quickly this way. The fact is that it will take a long time to accumulate the required amount. Most likely, this process will drag on for the entire service life. Those who do not agree to wait are offered to take out a mortgage loan.

You can buy a property as a result of a housing loan after three years of participation in the program. However, this method means additional material costs, which include interest under the agreement, fees for banking services, and in exceptional cases even fines and penalties. Raising funds from family capital can be a significant measure of support when repaying a loan.

Peculiarities

Combining maternity capital and a military mortgage allows you to remove the encumbrance on your home ahead of schedule. This makes it possible to dispose of property at your own discretion - sell, exchange, donate.

An apartment purchased with a military mortgage is entirely owned by the serviceman. However, if maternity capital is used to repay the loan, the military must allocate the shares of the spouse and children in the purchased housing. He is given 6 months to do this from the date of removal of the encumbrance. Thus, the apartment belongs to all family members equally.

To combine maternal capital and military mortgages, it is necessary that the spouses be officially married. You can only buy an apartment in Russia—financial support does not apply to other countries.

If, in addition to the mortgage, the serviceman has other loans, then the maternity capital funds can be divided among the creditors.

The legislative framework

The Russian state has developed special support programs for certain categories of citizens. For example, for military personnel, based on No. 117-FZ of August 20, 2004, the savings and mortgage system (NIS) is in effect.

Through this system, military personnel and their families can purchase residential real estate using state funds. The funds are accumulated in the serviceman’s personal account and are earmarked.

This is important to know: How long to wait for a housing subsidy for military personnel

That is, they can only be spent on buying a home.

In addition, Russia has a program to support families raising two or more children. It operates in accordance with Federal Law No. 256 of December 29, 2006. The subsidy received under the certificate can also be spent on improving or purchasing housing.

Previously, Federal Law No. 117 did not provide for the combination of military mortgages with maternity capital. But due to the absence of a direct ban on such actions, in practice the combination of funds still occurred.

Advantages and disadvantages

The advantage of using the two subsidies together is that there is no risk. The entire procedure is carried out by government agencies, it is absolutely transparent and safe.

Even after the military mortgage is repaid with maternity capital, funds will continue to flow into the serviceman’s account under the NIS program. This will allow you to use the loan again in the future and purchase real estate.

The disadvantage of combining this is the paperwork involved in processing two types of financial support at once and the lengthy review of documents. The military department deals with issues of military mortgages, and the Pension Fund deals with maternity capital. It can be difficult to process documents in two departments at the same time.

You also need to choose a bank that works simultaneously with military mortgages and maternity capital, and there are few of them.

Advantages

Combining maternity capital with a military mortgage is in the interests of the whole family. Such an association has many advantages. Main advantages.

1. A military mortgage allows you to dispose of only a limited amount. At the end of 2020, it was just over 2,400,000 rubles. If maternity capital is invested in the purchase of housing, the family will be able to buy an apartment with a larger area, increased comfort, or in a more convenient location in a prestigious area.
2. If a serviceman is dismissed for a number of reasons, without valid reasons, he is obliged to reimburse the federal budget for all funds contributed to the purchase of housing, as well as interest. If the loan is repaid with maternal capital, the family will be able to do it faster, avoiding unnecessary expenses.
3. When using only funds from the savings system, the purchased housing will be registered exclusively as the property of the officer. In the event of a divorce, the wife will not be able to receive part of the apartment; such real estate is not considered jointly owned by law.

If maternity capital is added to the military mortgage, then the premises purchased with these funds must necessarily be registered as shared ownership of all family members. This helps to provide housing for the wife and children even in the event of divorce.

1. You can pay off your mortgage early with maternity capital. In this case, the serviceman does not automatically drop out of the savings program. The state continues to transfer the established amount of funds to his account.

When a sufficient amount has been accumulated, the serviceman has the right to again use these funds to improve the living conditions of his family. They can purchase another apartment or arrange for the purchase of housing with a larger area, higher comfort, or in another locality.

Whether to combine maternity capital with a military mortgage is something each family must decide for itself. Payment under a certificate to a woman, in contrast to the savings system, also allows her to spend it on the education of children and a future increased pension. Spouses must determine what is priority and more beneficial for them.

In May 2020, the contradictions in the laws on the funded system and state support for couples with children were completely eliminated. This allowed military families who have the right to maternity capital to use its funds to invest in a mortgage. It is allowed to make payments both as an entrance fee on the loan and to pay off current debt. The purchased housing is registered in the name of all family members. These innovations significantly expand the possibilities for improving the living conditions of military personnel and their families.

Procedure:

• receive a certificate of participation in the NIS program;
• find housing and a bank;
• contact the bank to sell a military mortgage;
• conclude a mortgage agreement with the bank;
• submit an application to the Pension Fund, which will indicate the desire to use maternity capital to repay the loan/mortgage.

After that all you have to do is wait:

• checking the availability of all certificates and the authenticity of documents;
• transfer of maternity capital funds to repay a loan to a credit institution.

There is a danger here that some certificate has been completed incorrectly, and the Pension Fund will delay the transfer of funds. Then the borrower will have to make up the shortfall at his own expense.

The procedure for obtaining a military mortgage and maternity capital

As it turned out earlier, the Military Mortgage mortgage program and maternity capital can be used together. Military personnel who decide to purchase residential real estate using such instruments must adhere to the following sequence of actions:

1. Obtaining NIS participant status.

A potential borrower undergoing military service must initially contact his immediate superior with a corresponding report on participation in the savings system and receipt of a supporting document (certificate). This can be done no earlier than 3 years after the conclusion of the contract.

1. Finding suitable housing.

You should decide in advance on the specific property that will be purchased with borrowed funds. As a rule, such housing must be accredited by the bank where the loan will be issued. You can view the list of housing approved by the credit institution on its website or check with Rosvoenipoteka (a special authorized agency).

1. Selecting a bank.

The AHML website details the conditions for obtaining a military mortgage. The loan is directly processed through an agent bank. The list of such banks is quite limited and includes only reliable and large participants in the Russian banking sector.

You should study the proposed loan terms in detail, use a mortgage calculator and compare the results. Despite the fact that the parameters are generally similar, the difference in the final cost of the loan or other conditions can be significant for a particular client.

At the moment, only Zenit Bank allows the use of maternity capital as a down payment. All other banks allow military mortgages to be sent for early repayment.

1. Submission of documents to the bank and consideration of the loan application.

Usually, if all the requirements are met and the client fully meets the presented criteria, there are practically no problems in approving the submitted application. However, there may be exceptions here.

1. Conclusion of a loan agreement and a mortgage agreement.

If the bank makes a positive decision, the parties conclude and sign all the necessary documents - a loan agreement with a schedule of upcoming payments and a mortgage (pledge) agreement. After this, the mortgage agreement is registered with the relevant authority (Registration Chamber) and an encumbrance is placed on the purchased apartment in favor of the lender.

In the transaction, the third party will be the state institution Rosvoenipoteka, therefore all documents on the transaction will be agreed upon at its central office in Moscow and the apartment will be encumbered not only by the bank, but by this institution.

1. Submitting an application to the Pension Fund of the Russian Federation.

The spouse of a serviceman, who together with him has two or more children (which is also confirmed by the issued certificate for maternity capital ) must contact the territorial branch of the Pension Fund of Russia with an application to transfer the available amount of maternity capital to pay the down payment or existing debt. To do this, you will need to prepare the required package of documents in advance.

1. Consideration of the application.

Within a month, the Pension Fund of the Russian Federation checks the provided data and documents and transfers the available funds to a bank account using the specified details (usually directly to the loan account under the concluded loan agreement).

IMPORTANT! Some banks oblige the borrower to write a statement in advance about the upcoming early repayment. It is better to do this at least a few days before the receipt of the money transfer from the Pension Fund.

Documents for registration

To combine maternity capital and military mortgage, you will need the following documents:

• certificate for maternal capital;
• passports of spouses and birth certificates of children;
• documents confirming Russian citizenship;
• copies of the loan agreement with the bank and the apartment purchase and sale agreement (preliminary);
• marriage certificate;
• an obligation certified by a notary to allocate a share in the apartment to all family members (executed on behalf of the owner of the apartment - that is, a military man).

For what reasons can the Pension Fund refuse?

In 70% of cases, the Pension Fund approves the issuance of a certificate of maternity capital.

However, there are a number of reasons that are a good reason for a negative response to the provision of capital:

• submission of distorted data;
• recent deprivation of rights to state support;
• the entire family is citizens of another state or has no citizenship;
• the mother is deprived of rights to the child;
• the assistance has already been used previously.

Also, maternal support may initially rely on the father, but the parent will be deprived of capital if:

• deprived of parental rights;
• voluntarily abandoned the child;
• his death or official recognition as dead;
• committed a premeditated offence.

However, a separate list needs to highlight the possible negative answer at the disposal of material capital:

• incorrect sequence of submission of papers;
• denial of the opportunity to dispose of capital;
• deprivation of parents' rights to a child, in connection with whose birth the right to use capital is requested;
• the requested money does not correspond to the balance in the applicant’s account, this is possible if the capital has already been used in whole or in part;
• a purpose for spending funds that is unacceptable by law has been chosen.

From the moment the application for capital expenditure is submitted, the Fund has exactly 30 calendar days to consider. The answer, both positive and negative, will come in writing, since oral wording does not have due legal force.

If after the allotted period a response has not been received, the applicant has the right to complain to higher authorities about the inaction of government services.

To appeal a negative decision of the Pension Fund, you must first assess the situation and definitely find out the reason.

If the reason is not entirely correct data (typos in certificates, some documents have expired, etc.), it is recommended to simply correct these shortcomings and resubmit the application.

However, if the reason was something more serious, and the applicant does not agree with this, it is necessary to challenge the legality of the decision.

Thus, an independent application to higher authorities must include the following data:

• Full name of the applicant;
• the full name of the service about which the complaint is being written;
• Full name and position of the representative of the authority whose signature indicates the refusal;
• justification for an unsatisfactory response;
• the applicant's grounds for challenging the refusal.

If the application is rejected by higher authorities, you will have to resort to the help of a qualified specialist to appeal their decision. Together, an application form will be prepared, with an attached decision of the Pension Fund of Russia, for submitting documents to the courts.

If the court rules in favor of the Pension Fund, it will no longer be possible to appeal it, and the actions of the Pension Fund will be recognized as legal. However, if the verdict is rendered in favor of the plaintiff, the Pension Fund of the Russian Federation undertakes to approve the application for the issuance of a certificate or for the targeted expenditure of capital in the specified manner.

A prerequisite for the issuance of mat. capital for reducing the apartment loan is a further even distribution of shares among all family members. However, parents often renounce their share in favor of the child. Or register one person as the owner. This will require a waiver of the share of all parties to the agreement.

If one or more minor children are abandoned in favor of someone else, the presence of guardianship and trusteeship authorities is necessary when signing the documents. They act as a guarantor of the child’s legal protection.

Reasons for receiving a preferential loan

Military mortgage is a type of preferential lending that is available to contract soldiers of the Russian Armed Forces. The essence of the service is to obtain a loan for real estate on more favorable terms. The features of the state program include:

• Military mortgages are available to citizens who have a valid agreement with the Russian Ministry of Defense.
• Until the debt is repaid, the property acts as collateral.
• In the event of dismissal from the ranks of the RF Armed Forces due to the fault of a contract soldier, the latter loses the right to benefits.

Military mortgages are not available at all financial institutions. Only some lenders refuse the service, including Sberbank

This is why it is important to study the market and determine the available options before applying for a loan.

The advantage of the program is that after obtaining a mortgage, the serviceman’s family receives the property for use immediately after the conclusion of the contract. There is no need to wait for transfer to the reserve or other events.