Border mortgage at 0.1% — does it happen? Now yes! What are these territories, what are the conditions for obtaining
In Russia, you can get a rural mortgage at 0.1%. Moreover, it is issued not only in rural areas proper, but also in small towns, provided that they are located in border areas. Portal Experts
What is a rural mortgage in the border areas
The program has “grown” out of a conventional rural mortgage (at 3% per annum), which has been operating in Russia since 2020. Initially, the program was designed for two years, but in 2022 it was made indefinite. Even then, it was possible to get a rural mortgage at 0.1% — subject to additional subsidies from the bank or local authorities.
In January 2023, Russian Prime Minister Mikhail Mishustin signed a decree lowering the marginal rate on rural mortgages for border areas from 3% to 0.1%. The new conditions are effective from January 30.
The government allocated additional funds to compensate banks and Dom.RF for the costs of issuing rural mortgages in the border areas at a rate reduced to almost zero.
In which territories is the rural mortgage at 0.1%
These are not only villages proper, but also rural agglomerations — that is, urban-type settlements and cities with a population of up to 30,000 people. It is of fundamental importance that they be located within the boundaries of municipalities partially or completely located on the border territories of the Russian Federation:
- in border areas;
- in the Russian part of the waters of border rivers, lakes and other water bodies;
- on the territory of internal sea waters and the territorial sea of Russia;
- on the territory of border checkpoints;
According to the resolution, the program may also include sections of administrative districts and cities, sanatorium and resort areas, specially protected natural areas, «objects and other territories adjacent to the state border of the Russian Federation, the border zone, the banks of border rivers, lakes and other water bodies , sea coast or checkpoints)”. Dom.RF clarifies that the specific list of border rural areas that fall into the program in each specific region is determined by local authorities.
What real estate can be purchased with a rural mortgage at 0.1%
If the land plot on which the property is located falls under the definition of a border area, it can be purchased under this program:
- an individual residential building, a house of blocked development — for example, a townhouse or a duplex (according to DDU);
- a private house, a house of blocked development under a contract of sale from an individual (the house must be built no earlier than five years before the conclusion of a loan agreement);
- a private house, a house of blocked development under a contract of sale from a legal entity or individual entrepreneur (built no earlier than three years before the conclusion of the contract);
- land for building a house.
In addition, in such a territory it is possible to conclude a contract for the construction (or completion of construction) of a house.
The date of construction of the house is checked by the credit institution with which the mortgage agreement is concluded. A legal entity cannot act as a seller if it is a foreign, offshore company or an organization with an aggregate participation of offshore companies of more than 25%.
Anna Zholobova, Advisor to the Real Estate and Construction Practice of the Regionservis Bar Association:
The Decree introduces the concept of «rural territories of border municipalities», which means territories that are completely or partially located along the border of our state. Their list should be additionally determined by an act of the supreme executive body of the region of Russia.
The Decree states that lending is strictly targeted and obliges banks to exercise control over the targeted use of funds.
Under what conditions is a rural mortgage issued in the border areas
The program includes specific requirements for the place of purchase of the object, but not for the borrower himself, his marital status and place of residence. Any adult citizen interested in buying a home in rural border areas can apply for such a mortgage. Mortgages will be as follows:
- rate 0.1% per annum;
- first installment — at least 10% of the cost of housing or construction (maternity capital can be included in this amount);
- limit up to 5 million rubles. for the Leningrad Region, the Yamalo-Nenets Autonomous District and the regions of the Far Eastern Federal District and up to 3 million rubles. — for other regions;
- loan term up to 25 years;
- if a plot or a contract is purchased, the house must be built within 24 months.
You can only use this loan once. Mortgage conditions can be revised at the request of the borrower, if it is provided for by the loan agreement, as well as in cases provided for by law. These are, for example, credit holidays and the provisions of the Federal Law “On the specifics of fulfilling obligations under loan agreements (loan agreements) by persons called up for military service for mobilization in the Armed Forces of the Russian Federation, persons participating in a special military operation, as well as members of their families” .
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