Supported Expansion of IT Mortgage Lending Thresholds by Finance Minister
In a move to keep the IT mortgage program humming, the Russian Ministry of Finance has voiced support for raising the loan limits. According to the ministry's statement, this action aims to stave off the suspension of the program.
Currently, DOM.RF is redistributing the leftover IT mortgage limits among banks that have used up their initial limits (around 39 billion rubles), allowing the program to carry on until the Russian government finalizes its decision.
In Russia, various federal mortgage programs are provided, with the IT specialists' 5% mortgages being one of them. Last December, the Ministry of Digital Development proposed extending this program for employees of certified IT firms. During its nearly two-year run, more than 38,500 housing loans have been disbursed.
Interestingly, Russia's IT mortgage program for tech savvy individuals has seen a surge in demand, overshooting initial expectations. With over 70,000 IT specialists utilizing the program, loans amounting to 630 billion rubles have been issued, a 50% increase compared to the original expectancy for 2024. Banking sources indicate that the program's total loan limit across all banks may be depleted by July 2024, despite its official validity extending until December 2024.
In June 2024, the government directed the Ministry of Digital Development and the Ministry of Finance to earmark an additional 28.5 billion rubles to cover the costs of already distributed IT mortgages. It seems that talks are underway to extend the program past 2024, and from May 1 to October 31, 2025, increased subsidies to banks will lower borrower payments, signifying mid-term support for the program. The program continues to serve as a vital instrument for affordable housing in the tech sector, but its longevity hinges on persistent government funding and periodic adjustments to loan limits.
- The Russian Ministry of Finance's decision to raise the loan limits for the IT mortgage program is expected to help accredited IT firms, given the exhaustion of the current loan limits among banks.
- Due to the increased demand for the IT mortgage program, it is likely that Russian businesses will seek mortgages to accommodate the needs of the Russian society, especially considering the government's decision to earmark additional funding.
- The Russian government's recent decree to provide more funding for already distributed IT mortgages indicates its commitment to ensuring the continuation of the program, thereby providing affordable housing options for IT specialists in the country.
- As the IT mortgage program faces the possibility of depletion by July 2024, discussions are ongoing for its extension beyond that year, offering mid-term support for the society and the business sector involved, with increased subsidies scheduled from May 1 to October 31, 2025.
