Maternity capital for a mortgage: how to use government support

Within the framework of the law, it is possible to repay the principal debt or interest on a mortgage loan using maternity capital. There is no need to wait three years after the birth of the child - you can immediately issue a certificate and use it for its intended purpose. To repay a loan or interest, you must contact the bank and write an application. You can also pay off a refinanced loan. After receiving approval from the Pension Fund, the amount on the certificate will be transferred to repay the mortgage.

Since July 8, 2021, some banks have launched a service that allows you to submit an application for repayment via the Internet using maternity capital funds. Let's look at how to pay off a mortgage with maternity capital through a bank and in real time.

How to use maternity capital for a mortgage

Money allocated by the state as part of the social program to support families can be used in the following areas:

Make a down payment. Maternity capital can be used if the family does not have the funds for the down payment on the mortgage, which is usually 15% of the cost of housing. However, not all banks allow the use of a certificate, and the lack of initial savings can become an obstacle and limit the purchase of an apartment. The “Mortgage with Maternal Capital” program from “Rosbank Dom” provides the opportunity to use public funds for a down payment, and it can be 10% lower compared to the terms of standard programs.
Pay off interest and some of the mortgage debt. It is necessary to notify the credit institution of your desire to partially repay the mortgage early and write a corresponding application to the Pension Fund. The state will transfer the funds to the bank within 1 to 2 months.
Pay off the balance of the mortgage with maternity capital. Before paying off the remaining balance of the debt, you need to find out from the bank whether there is a fee for full early repayment. If it is not available, you can use maternity capital for a mortgage; to do this, you should contact the Pension Fund with a request to transfer funds to the bank.

Credit organizations may establish a number of restrictions on the implementation of state benefits for repaying a mortgage loan. You should learn more about the conditions for using the certificate from a representative of a particular bank.

Removal of encumbrance if the mortgage is completely closed

For my friends, this information is not yet relevant, but it may be useful to you - when the mortgage is completely closed, you need to request a confirming certificate from the bank and contact the Rosreestr branch or the MFC to remove the encumbrance on the property.

The removal of the encumbrance can be clarified on the Rosreestr website a week after submitting the application (about how long the information is updated). Read more about how to remove an encumbrance here.

What kind of housing can you spend maternity capital on?

The procedure for registration and implementation of targeted financial assistance to families with a child is strictly controlled by the Pension Fund. Answer to the question “Is it possible to use maternity capital for a mortgage to purchase a house or dacha in a rural area?” will be ambiguous.

The state imposes strict requirements on the property it helps purchase:

housing must be located on Russian territory and have an address;
the house must be suitable for living all year round;
a private home must have electricity, heat and other amenities;
the object should not be old, dilapidated or in disrepair;
It must be possible to register in an apartment or house.

If the above conditions are met, you can use maternity capital for a mortgage to buy not only an apartment, but also a dacha or a house in the village. Each property purchased through a mortgage loan and with the help of government support is strictly checked by the bank and the Pension Fund.

Mortgage with maternity capital: 2021

In 2021, maternity capital per child was indexed by 3.7%, and now its maximum amount is 639.4 thousand rubles.

Expert opinion: exactly how to improve living conditions

“As of January 1, 2021, the first child is entitled to a certificate for 483.9 thousand rubles. And if after January 1, 2021, a second baby appears, the state will pay 155.5 thousand rubles. If the right to maternity capital for the second child was not used by the family before January 1, 2021, then the payment will be slightly more than 639 thousand rubles. After registering a child with the registry office, a notification from the Pension Fund of the Russian Federation about the accrual of maternity capital should automatically appear in the personal account on the public services portal within five days.

First of all, the state allows, and citizens take the opportunity to improve the family’s living conditions at the expense of maternal capital. And the forms can be very different: purchasing housing in a new building or on the secondary market, a down payment or partial payment of a mortgage (including military and in rural areas), for equity holders - transfer to the developer’s escrow account, you can build a new house (dacha) or reconstruct existing housing,” says lawyer, founder and CEO of the vvCube consulting group Vadim Tkachenko.

Requirements for the borrower

They will be the same as when applying for a regular mortgage. However, there are a number of conditions that will increase the applicant’s chances of obtaining a loan using a maternal certificate:

The borrower plans to take out a mortgage from his salary bank. In this case, the credit institution considers the application faster, does not require proof of income, and may offer a reduced interest rate.
The family has additional savings in addition to maternity capital. This indicates that the borrower is able to repay the mortgage on time.
One of the family members works in a steadily growing company and receives a high and regular salary. The employer's relationship with the bank may also influence the loan decision and terms of the loan.
A good credit history is a big plus for the borrower. The bank may have doubts if there is no credit history and refuse if it is tainted by past unsuccessful loans.

The main borrower can attract up to three co-borrowers to increase the credit limit, who will be subject to the same requirements. At the same time, they will share the obligations of the main client to the bank.

Judicial procedure for invalidating a transaction

You should not try to deceive the state by completing a housing purchase and sale transaction without the obligatory allocation of shares, simply by agreeing with the bank. Even if the fraud can be pulled off, it will not be possible to submit supporting documents to the Pension Fund of the Russian Federation . After all, only after complete removal of encumbrances can you turn to a notary for the division of living space between all interested parties.

Sooner or later the deception will be revealed, and the swindlers will have a hard time. The court recognizes the transaction as void. The maternity certificate will also be cancelled, and the spouses will have to return the funds spent on it in full to the federal budget.

Therefore, selling an apartment with a mortgage with maternity capital during a divorce is a procedure that is almost impossible to carry out. The guardianship authorities will not give the go-ahead. After all, in return, housing must be purchased that is not inferior in technical and other characteristics to the one sold. It will also not be possible to voluntarily give up the share, because The responsibility to pay debts lies with both spouses. Divorce will not be a reason for revising the established rules.

Therefore, it is possible to think about dividing an apartment in a mortgage with maternity capital during a divorce only after repaying the debt and allocating shares to each child.

Using maternity capital for a mortgage: what documents are needed

The set of documents for obtaining a loan using a certificate differs slightly from the standard one. The process of collecting them is divided into two stages:

submitting an application to the bank;
concluding a purchase and sale transaction and issuing a mortgage loan.

At the first stage, the borrower will be required to:

passports;
children's birth certificates;
income certificates;
a certificate from the Pension Fund about the balance of maternity capital in the account;
state certificate;
photocopies of work records and contracts of both or one of the parents;
confirmation of registration of the main borrower in a constituent entity of the Russian Federation;
application form.

At the second stage, after receiving bank approval for the loan, you need:

real estate documents;
appraiser's report;
insurance of property (and, perhaps, health and life of the main borrower);
a written obligation of parents to allocate shares in the purchased housing to children, certified by a notary;
contract for the sale and purchase of a house or apartment.

What are the risks?

Maternity capital is a really good measure of support. Thanks to the certificate, you can reduce the monthly burden on the family budget and even close the loan completely ahead of schedule.

However, it is worth assessing not only the savings, but also the possible risks.

Reducing the amount of tax deduction

A 13% tax deduction is allowed only on the amount of personal expenses for the purchase of real estate, which is not maternal capital. Therefore, if you have already issued a refund, then the interest received from the MSK amount will have to be returned.

Difficulties in selling real estate

It is more difficult to sell housing in which shares are allocated to children. If there are minors in the family, then the consent of the guardianship authority will be required to conclude the transaction. If you cannot convince officials that the children will receive at least equal shares in other housing, then you will have to forget about the sale.

Is it possible to use maternity capital for a mortgage without waiting 3 years?

According to the legislation of the Russian Federation, funds allocated by the state can be used only after the child turns 3 years old. A mortgage against maternity capital is an exception to this restriction. Immediately after the birth of the child, the family can use the certificate for the following purposes:

down payment on a mortgage loan;
repayment of interest and part of the loan debt.

The procedure for processing housing transactions after repaying a mortgage with the participation of matkapital

There are cases when spouses decided to divorce after the removal of encumbrances on the living space, but the premises were purchased, among other things, with the participation of a certificate. In this case, the scheme for registering real estate transactions differs from the actions when the mortgage was divided during a divorce from maternity capital.

The apartment or house became the full possession of the residents, and the encumbrances were removed. It's time to allocate shares, without which it is impossible to carry out further transactions with the housing stock. The algorithm of actions prescribes mandatory contact with a notary office. The procedure for allocating shares includes the following steps:

allocation of shares to spouses with mandatory registration in Rosreestr;
a second visit to the notary to allocate shares to each child.

IMPORTANT! No more than 6 months should pass from the moment the encumbrances are removed until the shares are allocated to the children. The rule is the same for both married couples and those who have gone through divorce proceedings.

The allocation of shares is not required if at the initial stage of purchasing residential real estate they were allocated to all family members. This is practiced when making a down payment using subsidized funds. Consequently, there is no need to visit a notary’s office, and it is enough to take to the registration chamber documents confirming the complete closure of the mortgage debt (mortgage note and a certificate from the bank about the absence of debt).

It is worth noting that the share is a minimum of square meters per person. The numbers vary in each region. The average for Russia is 18 sq.m.

Recommended article: Seller's risks when selling an apartment for maternity capital

What can the funds be used for?

Repay a loan. If there is enough money to fully repay the mortgage with maternity capital, the borrower will be able to pay the debt in final payment.
Pay interest and partially the loan body. This option is suitable for borrowers who have paid their mortgage not long ago and still have an impressive debt balance. In case of partial early return, the amount of overpayment for the transaction is reduced. The debtor will be able to reduce monthly payments or the loan term.
Making a contribution using your own funds. Having a down payment will allow you to obtain a mortgage on more favorable terms, a favorable interest rate will be offered, and the loan amount will increase.

Banks allow early and partially early repayment of debt, no penalties are collected, and no additional conditions are imposed. The main thing is to fill out the application correctly and comply with the repayment regulations.

Having a certificate does not guarantee getting a mortgage!

Banks allow funds to be invested in a mortgage transaction, but this does not increase the likelihood of issuance. If the applicant is declared insolvent or has a bad credit history, the lender will refuse to issue the loan, regardless of whether the client has maternity capital.

Required documents

Like any other financial transaction, mortgage lending is not complete without collecting documents. And if we take into account that the client plans to use a mat capital certificate, then the bureaucratic side of the issue becomes even more complicated, since in addition to the bank, it is necessary to obtain approval from the Pension Fund.

If you are just planning to apply for a mortgage and want to make a down payment using a certificate, then first you need to contact the bank and choose a suitable loan product for yourself. As a rule, it is not always possible to obtain consent to fully use the funds of the certificate; the bank may require payment of at least 5% in cash. If the loan is issued before the certificate is issued, then the client can use it as a means to pay off the total debt or interest on the loan. The client needs to notify the bank that he wants to repay part of the amount early using federal funds. The bank will provide him with a statement of current debt, with which the client will contact the Pension Fund. In any case, this option is the most attractive for both the client and the bank.

You must immediately obtain information from the bank about the required package of documents. Collecting them can take up to a month. Therefore, it is better to find out all the circumstances in advance. The same applies to pensions. Their list of documents is also significant.

For a pension fund

The pension fund is a rather painstaking organization, so the process of processing any payments is quite complicated and long. If you plan to use your mother’s money to pay off your mortgage, then you need to contact the Pension Office and receive the certificate itself. To do this, a citizen must have with him:

A statement drawn up according to the sample;
Copies of the passport of a citizen of the Russian Federation (both mother and father can apply);
A copy of the baby’s birth certificate or the child’s adoption order;
A certificate to confirm the child’s citizenship if one of the parents is a non-resident of the country.

After consideration of the application, the applicant is issued a certificate of the established form. It is with him that the client goes to the bank to approve the decision on early repayment. Next you need to contact the Pension Fund again.

To approve payment to pay off your mortgage debt, you must have:

certificate previously received upon application;
passport of the citizen who issued the certificate (only one of the parents or official guardian issues the documents);
an application drawn up according to the sample for the payment of money from maternity capital (sample https://ipotekunado.ru/wp-content/uploads/2019/02/rasporyazhenie.docx);

Fig. 1 Example of filling out an application for the use of mat capital

a loan agreement for the purchase of an apartment, which must state the purpose confirming the intended use of the money, namely, solving the family’s housing issue;
a certificate issued by the bank with the amount remaining to be paid;
a document certified by a notary obliging the owner of the apartment, after full repayment of the debt, to register the property in the name of all family members in equal shares.

Note! The Pension Fund of the Russian Federation may request additional documents, for example, a court decision, if one of the parents in the family has been deprived of parental rights, a power of attorney to conduct business, if necessary.

For Sberbank

After receiving the documents, the Pension Fund has 2 months to make a decision. If it is positive, then the next stage is submitting applications to the bank. The client will need:

Passport;
Certificate;
Certificate from the Pension Fund about the balance in the account intended for storing capital;
Statement of desire for early full or partial repayment of the loan debt.

After this, the bank allocates a cell for depositing funds and the pensioner transfers the money to the bank account. You need to clarify right away that all attempts to cash out money fraudulently will not work. The pension authority controls every targeted expenditure of budget funds.

Basic requirements and mortgage repayment procedure

Basic requirements are established in Art. 10 Federal Law No. 256:

You can purchase real estate located in Russia.
In residential premises, a share must be allocated for spouses and minor children.
Funds are provided to one of the parents, most often the mother is the owner of the certificate.
Funds can only be used to improve housing conditions: for the purchase or reconstruction of housing, for concluding a management agreement, for individual housing construction.
The loan must be obtained from a bank, credit cooperative or AHML (House of the Russian Federation).
You can pay off the actual debt and/or interest; the funds cannot be used to pay fines, accrued penalties, commissions, etc.
The transaction is carried out in a non-cash form, so the real estate seller must have an account to which the funds will be transferred.
In order to prevent fraudulent cash transactions, purchasing residential premises from relatives is not allowed.
You can use all or part of the funds in the account. Money is allocated not monthly, but in one amount.

Regardless of who the certificate is issued for, the state allocates funds for the whole family. Therefore, if a spouse who is not the owner took out the mortgage, you can use the funds to pay off the debt.

You can spend money on repaying a housing loan without waiting until your child turns 3 years old

In order to repay the mortgage, you will need to agree on a deal with the pension fund and the creditor bank.

Cases of appeal to the courts

Conducting transactions with residential real estate where minor children are involved is quite difficult, especially during divorce proceedings. Things are doubly more complicated when it comes to mortgages using maternity capital during a divorce. Dividing an apartment or house involves a number of difficulties. This is due, first of all, to the mandatory allocation of shares to each child, as described above.

But there are other pitfalls. For example, one of the parents refuses to fulfill the obligation to allocate shares to the children. Then the second interested party will have to apply to a court of general jurisdiction with an application for the forced determination of shares between the former spouses and children.

Another case is when the property of one of the former spouses is seized (when dividing bills to pay the mortgage). Then it is necessary to establish the reasons why it is impossible to allocate shares. This can only be done in court, as well as the seizure of shares can be lifted.

Judicial practice on divorce in the case of a mortgage with maternity capital shows 2 options for the development of events:

the draft dodger will fully pay the overdue debt with fines as determined by the court;
the legal authority will deprive the defendant of having a share in the housing.

You can get information and legal advice about divorce and mortgages with maternity capital on forums where real stories from the lives of citizens are presented.

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Author:

Mortgage specialist Maria Yurievna Sokhan

Publication dateDecember 10, 2019December 11, 2019

Step-by-step instructions for investing mat capital in a mortgage

How to pay off a mortgage with maternity capital:

Carefully study the conditions for early repayment of the mortgage established by the loan agreement. Banks set different requirements for paying debts ahead of schedule; usually you should apply 15–30 days before the date of the next scheduled payment. The debtor must formalize his intention in writing.
Receive a certificate from the credit company about the balance of debt and interest with account numbers for transfer.
Notify the regional office of the Pension Fund;
Receive a list of necessary documents on the website of the State Services or Pension Fund and collect them;
Prepare an application. The form can be downloaded on the website or obtained from its representative office on site.
Submit a package of documents for review.
Wait for a decision.
Contact the bank with an application for early repayment.
After approval, the money is transferred to the accounts specified in the bank certificate.

After the transaction is completed, in case of partial early repayment, the lender will create a new debt repayment schedule.

Deadlines for transferring money

According to Art. 8 Federal Law No. 256, the application is considered by the Pension Fund within up to 30 days. Within the next 5 days, the applicant will receive notification of the decision. If a refusal to pay is received, the document must contain the reasons. If a positive decision is made, the money is transferred in accordance with the application within ten days (clause 17 of PP No. 862 of December 12, 2007). This must be taken into account if the funds are included in the final settlement of the mortgage repayment, since during the consideration of the application interest the debt balance is accrued as standard, and the amount payable can be changed.

How to submit an application electronically

In accordance with PP No. 553 dated 07/07/2011, the State Services portal has implemented the ability to electronically fill out an application for preliminary consideration and sign up for a visit to the Pension Fund to provide original documents. When applying through the State Services portal, you must first register on the site and confirm your account.

The procedure is as follows:

Log in to the site;
Select the “Services” navigation panel;
Go to the “Family and Children” category;
Open “Management of maternity capital”;
Select the type of receipt;
Read the package of documents;
Click “Get service”;
Complete an application and submit it for consideration;
After 1–2 days, the user will receive an invitation at what time he can come to the Pension Fund with the original documents.

How to pay off a mortgage with maternal capital at Sberbank

You can repay your mortgage with maternity capital in 2021 at almost all credit institutions that issue loans secured by real estate. The largest volume of issuances falls on Sberbank, VTB, Dom. Russian Federation, Delta Credit mortgage bank.

Sberbank offers families with children to use the “Mortgage plus Maternity Capital” program to purchase finished housing or housing under construction. Certificate funds can be made as a down payment or used to pay off existing debt.

Conditions for repayment:

The money was spent on the purchase of finished or under construction housing from an accredited seller company.
The owners of the real estate are the borrowers and their children.
The debt can be repaid after 6 months from the date the loan was issued.
It is necessary to submit to the bank a Certificate and a certificate from the Pension Fund about the balance of funds in the account. The certificate can be submitted to the bank within 3 months after approval of the transaction, along with real estate documents.

Loan repayment conditions in other banks are similar

Contacting the Pension Fund

The owner of the Certificate applies to the Pension Fund of the Russian Federation with an application for the disposal of maternity capital, indicating the type of expenses and the amount of funds.

In accordance with GD No. 862 dated December 12, 2007, the following documents will be required:

For spouses: ID cards of husband and wife; marriage certificate or divorce certificate if the applicant is divorced;
For real estate: documents confirming the purchase of real estate and its ownership by the borrower;
From the lender: a loan agreement with a repayment schedule, a collateral agreement, a certificate of the balance of the loan debt and interest on the date of application, confirmation that the loan was issued by transferring funds to the account;
A written obligation of the borrower to register a share for each family member, certified by a notary;
Certificate with account details of the certificate owner;
If maternity capital is used to improve housing conditions, a permit for construction or reconstruction is additionally provided, as a result of which the area of housing will be increased in accordance with the accounting norm;
With individual housing construction, documents for the land plot are submitted.

The rules for submitting documents are established by Order of the Ministry of Labor of Russia No. 606n dated 08/02/2017. They determine that the certificate holder must submit a request personally or through an authorized representative. The application can be submitted at any time, regardless of the child's date of birth.

Application methods:

Visit to the Pension Fund;
Visit to the MFC;
Sending by mail;
Online through the websites of State Services and the Pension Fund.

Basic conditions

Sberbank, as a giant in the banking industry, has provided many offers for its clients. Each loan program is unique and can satisfy even the most demanding borrower. Thus, young families with maternity capital can take out a loan for housing that is ready or just under construction, choosing a more suitable option for themselves. Moreover, the use of funds to repay the down payment can be either partial or full.

When purchasing finished housing, clients can receive a loan at an interest rate of 9.1% per year, for a period of up to 30 years and with a down payment of 15% (https://www.sberbank.ru/ru/person/credits/home/buying_complete_house ). The bank can offer the property being purchased as collateral, which is the only option for most families. If a family chooses an apartment from a DomClick bank partner, then the bank undertakes to provide a 0.3% discount on the mortgage. Another advantage of obtaining such a mortgage is the opportunity to return part of the money paid by applying for a tax deduction. True, you can only claim this compensation once in your life.

When purchasing housing under construction, the client receives a wider field of choice, but on the condition that the development company cooperates with Sberbank. The amount of interest on such a loan will be significantly less, from 7.6%, the down payment will remain the same - from 15%, and the term can also reach 30 years. Moreover, in each individual case, when cooperating with partner developers, the bank’s clients can count on additional discounts and bonuses (https://www.sberbank.ru/ru/person/credits/home/buying_project).

What is maternity capital?

Mat capital is assistance from the state budget introduced in 2007 for families who have had a second or subsequent child born or adopted. This type of subsidy, issued in the form of a certificate, the nominal value of which in 2021 is 453 thousand rubles. It can only be used for the intended purpose, in accordance with the prescribed rules of the law.

According to the resolution, mat capital is suitable for use for the following purposes:

for the development and education of the child (from 2021, a family can pay for kindergartens, universities, and also officially attract nannies and private teachers);
to accumulate the mother’s future pension with the help of authorized funds;
to ensure the full development and education of disabled children;
to obtain monthly assistance for a low-income child until the child reaches 1.5 years of age (the amount of the benefit is individual and determined according to the region of residence of the family);
for the purchase of an apartment, both finished and under construction;
to carry out major repairs and improve existing housing;
to obtain a loan (down payment, payment of mandatory payments and interest on the loan);
to refinance a previously issued mortgage;
to pay off the debt of the share contribution and equity participation.

The use of budget funds for most purposes is possible only from the moment the child reaches 3 years of age. But this does not apply to mortgages, kindergarten payments and monthly payments for a child. In case of waste of money for other needs not approved by law, sanctions will be applied to recipients of certificates.