Mortgage for military personnel in Ukraine

This decision is of great social importance, because it not only helps improve the living conditions of military personnel and their families, but also encourages the military to preserve and maintain national security.

The preferential mortgage is an important step toward meeting the housing needs of those who risk their lives to protect the country. It allows military personnel not only to gain access to housing, but also to do so on favourable terms, which makes their social and financial situation easier.

The program is one of the government’s initiatives to develop housing construction in Ukraine and helps to increase the affordability of housing for a wide range of citizens. It can facilitate the process of obtaining housing for military personnel and make their future more stable and secure.

In this article, we will look at what mortgage lending is, whether it is necessary to pay a mortgage during a war, what opportunities military personnel have for obtaining housing in 2023, and what documents are required to obtain a mortgage.

The essence of mortgage lending

A mortgage is a special type of loan provided by banks and other financial institutions in which your home becomes collateral for the loan. This means that you can get a loan to purchase or build real estate, such as an apartment, house or land, and this property remains in your ownership and use.

Mortgage lending is popular in Ukraine and is used by different segments of the population. Its main advantage is that you can purchase a home even if you do not possess a large amount of money. Borrowers take out a loan from a bank to purchase housing, but pledge this housing as collateral to the bank, which has the right to claim it if the debt is not repaid.

This mechanism makes it possible to gain access to housing and pay for it gradually, spreading payments over a long period of time. This approach helps more people realize the dream of owning their own home or apartment.

Is it necessary to pay off a mortgage during a war?

On February 28, the Chamber of Commerce and Industry recognized the Russian full-scale invasion to Ukraine as a force majeure circumstance. A force majeure circumstance temporarily gives the right not to fulfil the terms of a loan or mortgage agreement. This means that borrowers have the right not to pay their obligations during the period when hostilities pose a threat to their lives and safety.

Many banks have established a voluntary compromise with their customers at the time of force majeure. For example, if the territory in which the property is located has not been damaged by hostilities and the client has a stable source of income, they must go on pay the mortgage. However, for other clients who find themselves in difficult circumstances due to the war, banks may provide certain benefits and consider individual cases.

It is also important to consider that there are different types of banks in Ukraine, including state-owned, commercial and banks with different capital. Regardless of the type of bank, the attitude towards repaying a loan and mortgage may be similar. Most banks comply with general rules and responsibilities for lending operations regardless of their capital. However, it is important to be careful and contact the bank to obtain specific information and recommendations regarding force majeure circumstances, which include martial law.

“eOseliia” is a mortgage for military in 2023

In 2022, the government launched the “eOseliia” program – a government mortgage lending, designed to improve the living conditions of privileged categories of citizens. Initiated by President Volodymyr Zelenskyi, this program is aimed at supporting career military personnel, security forces, medical workers, teachers and scientists, making it possible to obtain a mortgage loan at a low annual interest rate of only 3% per annum.

However, since August 1, 2023, the government has expanded the range of categories of citizens who can take advantage of this program.

The “eOseliia” suggests that the Ukrainians take out mortgages from banks, and the state compensates institutions for a reduced interest rate. This means that the program participants can purchase a home with a mortgage at 3% per annum, which is a significant relief compared to the standard rates of 15% to 25% that banks offer to other clients.

The conditions for participation in “eOseliia” program determine the participant being from 18 to 70 years of age on the date of loan repayment, belonging to preferential categories of citizens, lacking their own housing or having the housing with limited area, as well as other criteria that guarantee the objectivity of the participants choice.

The “eOseliia” program has become an important step in meeting the housing needs of citizens and helped reduce the financial fencing for obtaining their own housing in Ukraine. This initiative has a significant social impact and improves the lives of subsidized households.

You can find detailed information about the promotional offer for military personnel from the RIEL Real Estate Corporation on our website by following this link.

Housing lending for military personnel: how to participate in the “eOseliia” program

If you intend to participate in the “eOseliia” program and purchase housing on favourable terms, you should be aware of several important aspects of the procedure.

1. Developer's choice. According to the program, you have the opportunity to buy housing only from developers who are accredited by the banks participating in “eOseliia” program. It is important to choose a reliable developer that you trust.
2. Financing model. This program provides lending only under financing models in which you become the owner of property rights to housing under construction, subject to obtaining a loan.
3. Filing an application. You can apply for participation in the “eOseliia” program in any way convenient for you, using the “Diia” application. A few simple steps – and your application is already sent to one of the six partner banks of the program.
4. Requirements for the borrower. The usual requirements for borrowers include the absence of a property with the area exceeding 52 square metres at the time of submitting an application. You should also bear in mind that the loan will not be provided if the borrower’s age exceeds 70 years by the time the loan is repaid.

What type of housing can be purchased using the “eOseliia” program?

The “eOseliia” program establishes certain restrictions and requirements for the type of housing, its area and construction date, which apply to all program participants without exception.

“eOseliia” applies to houses with construction readiness from 20% to 30%. Such houses have several floors already built, and active construction dynamics are observed. This provides borrowers with the opportunity to obtain housing in a property that is rapidly approaching completion.

As for the housing area, the program establishes that 52.5 sq. m. is assumed per person. For a family, another 21 sq. m. is added for each family member. That is, a family of three has the right to count on housing with an area of no more than 94.5 sq. m. This provides a comfortable living space for the “eOseliia” program participants.

The overall purpose of these restrictions is to ensure that program participants receive housing that meets their needs and affordance.

To apply for a mortgage in the “eOseliia” program, it’s necessary to collect the following basic documents:

1. Borrower's personal data:
   • Full name and contact details.
   • Information about the preferential category (if any).
   • Registration number of the taxpayer's account card.
   • Citizenship and personal data (date of birth, place of birth).
   • Ukrainian passport.
2. Housing information:
   • The total area of residential real estate that you are going to purchase under the program.
3. Information about your family (if any):
   • Marital status and information about family members.
   • Income of family members for the last six months.
4. Other documents:
   • A note about the absence of agreements in force concluded under the preferential lending program.
   • A note indicating consent to the processing of personal data and access to credit history.

These documents and information are the basic requirements for successfully obtaining a mortgage under the “eOseliia” program. If you have them, you can apply for a mortgage quickly and efficiently.