The Russian government has updated the conditions for rural mortgages, making them more difficult to obtain starting March 28, 2025. The changes aim to tighten access to this preferential lending program, which offers loans at a low interest rate of 3% per annum for a period of 25 years, specifically for the construction or purchase of housing in rural areas.
Under the new rules, borrowers must now be employed in the agro-industrial complex (AIC) or the social sphere related to rural territories for at least five years from the date of the loan agreement. Previously, there were no such requirements regarding the duration of employment.
According to the Ministry of Finance, the program, dubbed "Rural Mortgage"-2025, has seen significant uptake in recent years. In 2024 alone, banks issued approximately 24,000 loans under this program, amounting to nearly 120 billion rubles. The demand was so high that lending was temporarily paused in the second half of the year to avoid exhausting the available funds.
These new stipulations are designed to attract and retain specialists in the agricultural sector, thereby stabilizing the demand for housing in rural areas. The tightening of conditions is seen as a necessary step to mitigate potential shortages in funding and ensure that the program remains sustainable.
As part of the updated requirements, borrowers must be engaged in certain professional activities. They can work in organizations subordinate to the Ministry of Agriculture, the Federal Agency for Fishery, or the Federal Service for Veterinary and Phytosanitary Supervision, or they can be self-employed in the agricultural sector. Additionally, participants in special military operations and their spouses are also eligible to apply for these loans.
Moreover, if a borrower ceases to work in the relevant industry, they will have six months to secure new employment. Following this period, they must inform the bank within five years that their new job meets the necessary criteria. Failure to do so could result in an increase in the interest rate on their mortgage.
These updated conditions are expected to remain in effect until the end of 2025, or until the demand for the program decreases. The government has indicated that it does not plan to terminate the rural mortgage program but is committed to ensuring its longevity and effectiveness.
In summary, the changes to the rural mortgage conditions reflect an effort by the Russian government to ensure that the program serves its intended purpose of supporting the agricultural sector while managing the demand for housing in rural areas. By requiring borrowers to demonstrate a commitment to their professional field, officials hope to create a more sustainable lending environment.
