The government has approved new terms for the “Family Mortgage” program, which currently accounts for about half of all housing purchase loans: 42% in July and 66% in June. At present, the program’s rate is 6% per year, the limit is up to 12 million rubles in Moscow, St. Petersburg, the Moscow Region, and the Leningrad Region, and up to 6 million rubles in other regions, and families with a child no older than 6 years old or with two minor children can take out the loan.
Starting October 1, the loan parameters will depend on the number of children: the more children there are, the higher the amount and the lower the rate. In all regions except Moscow, St. Petersburg, the Moscow Region, and the Leningrad Region, for families with five or more children, if at least one child is still under 7, the rate will be 2%, and the maximum amount will be 10 million rubles. A family with one child no older than 6 will be able to borrow up to 6 million rubles at 10% per year.
In Moscow, St. Petersburg, and their regions, the rate will be 2 percentage points higher. For families with three or more children, the limit there is set at 18 million rubles, for families with two children — 15 million rubles, and for families with one child — 12 million rubles.
At the same time, the maximum subsidy period is being cut in half: instead of 30 years, the state will support the rate for only 15 years, after which the loan terms will become market-based. Currently, banks on average stretch the loan term to almost 25 years, whereas in 2019 it was 17 years.
These changes cut off a significant share of potential borrowers from the program, above all many families with one child. Two out of three Russian families have only one minor child, and raising the family mortgage rate from 6% to 12% in the capitals for such borrowers will increase the monthly payment by about 60%, Sberbank calculated. Promsvyazbank analyst Laura Kuznetsova noted that this could significantly reduce mortgage affordability for most families, and Expert RA analyst Alexey Kiryukhin said that the program’s attractiveness for families with one child would sharply decline.
Deputy Minister of Construction and Housing and Utilities Nikita Stasishin said that the terms of the state program should be aimed at encouraging birth rates. At the same time, a Domclick study showed that family mortgages do not encourage larger families: on the contrary, the housing issue makes families postpone expansion. To save up for a down payment on a new-build apartment with an area of 65 sq. m, the average family needs more than 6 years, whereas in 2019 it took 2.3 years. CIAN calculated that maternity capital for the birth of a first child in cities with a population of over 500,000 last year could buy from 2 to 8 sq. m of housing on the secondary market, while the down payment on a new-build must be at least 20%.
According to Alexey Kiryukhin, changing the parameters of the family mortgage will lead to a noticeable drop in demand; Laura Kuznetsova expected the number of subsidized mortgage issuances to fall by 15–20%. Against the backdrop of already declining new-build sales, this could intensify developers’ problems. Deputy Prime Minister Marat Khusnullin said that the minimum mortgage issuance volume necessary for the industry is 4–5 trillion rubles per year and said that this is the lower threshold at which the industry will not collapse.
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