Russia is gearing up to roll out long-term concessional mortgages for new housing starting mid-2024, though the eligibility rules will become stricter. The development was reported by the newspaper as part of a brief update, cited as News.
The plan was sketched out by the state housing agency DOM.RF. The current program remains open to all citizens but runs for a fixed period and is renewed annually. Historically, housing demand and prices tend to rise as a program nears its end. A permanent, targeted long-term scheme could help stabilize demand, directing benefits to families with two or more children or those with a child with a disability. When Russia’s key rate from the Bank of Russia exceeds 10 percent, the benefits would extend to all citizens, albeit with income caps. In a letter to the State Duma, the Ministry of Finance signaled that a similar targeted approach enjoys support from the ministry, aligning with the aim to balance market supply and demand through sustained preferential mortgage measures.
The Ministry of Finance argued that maintaining a functioning market pricing mechanism requires continued government support, but that such support should be targeted to those in need. This view was conveyed in correspondence with State Duma deputy Alexander Yakubovsky, stressing the importance of focused policy to prevent distortions in housing markets.
DOM.RF, the operator responsible for preferential housing programs, has put forward concrete proposals to adjust these initiatives. The new proposals contemplate including residents of smaller settlements where housing supply does not meet demand into the preferential citizen category, broadening the reach of the program beyond densely populated areas.
Just a day earlier, the Central Bank of the Russian Federation indicated support for raising the down payment required for a preferred mortgage, signaling a shift in risk assessment and policy stance that could influence borrower behavior and program sustainability.
Earlier discussions had warned about potential limitations on concessional mortgages that could dampen their effectiveness, underscoring the delicate balance policymakers strive to achieve between encouraging affordable housing and maintaining financial stability.