The State Duma discussed a presidential initiative. This year, 30,000 Russian families will receive 450,000 rubles ($7,000) from the government to pay off their mortgages. The relevant legislation was adopted in the first reading today. The measure applies to parents who had their third or any subsequent child this year. That's a rare case when the law will have retroactive force at the insistence of the president.
Alexander Yevstigneev with the details.
The Frolovs have three daughters: 17, 10, and the youngest, Vera, is four months old. They need a roomy apartment. The family took out a 20-year mortgage. The apartment is still being renovated but they're already paying the loan, which is 35,000 per month.
"It's hard when you have three kids".
Irina Frolova: "We always welcome state support. It's vital for families with more than two children".
Now, they have a chance to pay less. The State Duma is considering a bill allowing a family that had their third, fourth, fifth, and etc kid to receive 450,000 rubles to pay off a mortgage regardless of which parent took it.
Anatoly Aksakov, member of State Duma: "If they're co-borrowers, one parent gets the money, which they can use to pay off their mortgage".
Young families need additional state support. The idea was voiced by Vladimir Putin back in February in his Federal Assembly address. Yes, they do get a reduced mortgage rate of 6% but the state is ready to provide more help.
Vladimir Putin: "Right now, they take a loan and begin paying it off. That's where their benefits end because the interest rate is only subsidized for the first 3 or 5 years of the loan. I propose that we extend the benefits to the entire duration of the mortgage. Naturally, that'll require additional investment. A lot of money. It'll be 7.6 billion rubles ($117 million) in 2019, 21.7 billion rubles ($334.5 million) in 2020, and 30.6 billion rubles ($472 million) in 2021. However, according to our estimates, the program can support 600,000 families".
The new 450,000-benefit is simple. A family has their third child. The parents bring the birth certificate and an application form to the bank that gave them the loan. Next, the project operator Dom Rf comes in. It files requests with the Civil Registry Office and Rosreestr. The family doesn't need to submit any additional papers.
Alexey Nidens, Dom Rf: "We process the applications, check if they meet all the requirements, and if the application is approved, we transfer the money to the bank which uses the sum to pay for the family's mortgage".
A rare case: The law will have retroactive force. The money will be provided to families expecting their third child and the families who had their third child on or after January 1st, 2019. Note that these families still get maternity capital.
The State Duma studied statistics. An average mortgage loan in Russia is 2.5 million rubles ($38,500). Considering that a family gets 450,000 rubles ($7,000) of maternity capital when they have a kid and is now entitled to another 450,000 rubles of state support, the loan sum can be reduced by more than a third, by 900,000 rubles ($14,000). This also reduces monthly payments.
If the bank loan is less than 450,000, it's cleared and the rest of the money returns to the budget. Ten billion rubles ($154,000) have been allocated for the project in 2019. That will support tens of thousands of families and help implement the national projects.
Nikolay Alekseyenko, analyst: "That'll support the construction industry. It's also an additional incentive to solve demographic issues. I believe it'll have a multiple-vector effect".
Three kids or more, every family will get 450,000 rubles for every child born, if they take out a mortgage for a larger apartment every time they have a new kid.
Alexander Yevstigneev, Yelena Finoshta, Anna Mitrokhina Yekaterina Maximova, and Maxim Shchepilov Vesti.
