Russian Government assigns over 100bn rubles to fund and boost subsidized mortgage programs
The Russian Government has allocated 100.4bn rubles to actively support and implement the state subsidized mortgage programs, specifically, to fund the annual interest rates on the Family Mortgage, Far East and Arctic Mortgage programs, according to the Government’s Press Service.
These steps are a part of the general necessary measures taken by the government to stimulate the growth of demand, which has dropped for a number of reasons, on the real estate market, Russian Prime Minister Mikhail Mishustin said. These measures include the abolition of the additional commissions charged by banks when issuing state subsidized mortgages, expansion of the limit or size of the mortgage loan programs and temporary subsidization of the annual interest rates on project financing loans for new residential building developments, the prime minister added.
The funds, needed for financing these programs, will come from the Government Reserve Fund. Specifically, 53.4bn of the allocated 100.4bn rubles will go to subsidizing the Family Mortgage program, which will enable banks to retain the annual interest rate on new loans, issued to citizens with children, at the current level of 6%.
About 9.6bn rubles will be used to finance the subsidized 2% annual interest rate on new loans issued to the residents of the Far East and Arctic regions for buying residential apartments within the Far Eastern and Arctic Mortgage policy and 37.4bn rubles will used to subsidize the annual interest rates on previously issued loans under the Preferential Mortgage program, according to the press service.
For comparison, the average annual interest rate on commercial, non-subsidized mortgage loans currently ranges from 18.49% to 22.49%, according to the industry data collated by the Unified Information System of the Real Estate Development Unit of Dom.RF, the government’s financial development institution overseeing the state’s housing policy initiatives in the country.
by Christopher Kenneth
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