«eOselia»: 20-year mortgage at 3 and 7 percent with AXIS
The state program for subsidized mortgage lending "eOselia" has revitalized the real estate market in Ukraine. The program has been operational since October 2022, and during this time, about 8,200 families have already taken advantage of it.
Such mortgage conditions had never been seen before in Ukraine
Previously, Ukrainians could only dream about long-term loans for purchasing housing at an annual interest rate of 3 percent. However, with the onset of Russia's full-scale invasion of Ukraine, the Cabinet of Ministers took decisive steps aimed at providing citizens with their own homes. One of these was the reimbursement of a significant portion of the interest rate on mortgage loans to banks.
Thus, the state program "eOselia" was born, allowing Ukrainians to take loans for purchasing housing at two subsidized rates – 3 and 7 percent per year depending on the borrower's category.
According to the state program, loans are provided for a period from 1 to 20 years. The initial deposit is from 20% of the mortgage value, with the maximum loan amount being 6 million UAH. Borrowers must have the funds for the initial deposit (read more about the combination of "eOselia" with the state compensation program for destroyed housing "eVіdnovlennia" below).
Who is eligible for the subsidized loan?
Currently, the 3-percent rate under the "eOselia" program is available to citizens of strategically important professions: contract military personnel, law enforcement officers, teachers, medical workers, and researchers of state and communal institutions.
To specify, the law enforcement structures include:
- SBU (Security Service of Ukraine);
- Foreign Intelligence Service;
- GUR Ministry of Defense;
- National Guard of Ukraine;
- State Border Guard Service;
- State Guard Department;
- State Special Communications;
- State Special Transport Service;
- Specialized Prosecutors in the field of defense OGP;
- State Emergency Service;
- Judicial Protection Service;
- State Bureau of Investigations;
- Bureau of Economic Security;
- Ministry of Internal Affairs.
Those eligible for the 7-percent mortgage include:
- war veterans and their family members;
- combatants;
- persons with disabilities due to the war;
- families of deceased (dead) war veterans;
- families of deceased (dead) defenders and defenderesses of Ukraine;
- internally displaced persons (IDPs);
- citizens who do not own housing or need to improve living conditions (the living space must not exceed the indicators set by the Government – more on this below).
What Apartment to Buy?
There are specific requirements for housing that can be purchased under the "eOselia" state program. The area of the apartment must not exceed 52.5 m² per person, plus an additional 21 m² for each subsequent family member. Therefore, a family of three can expect a home no larger than 94.5 m². Moreover, if your current living space is less (less than 52.5 m² per person plus 21 m² for each subsequent family member), according to the law, you need an improvement in housing conditions.
"eOselia" sets age requirements for the building in which you plan to buy an apartment—it must not be older than 10 years (this applies to Kyiv and regional centers). If you are taking out a loan at 7%, this requirement reduces to 3 years. In other cases, such as when purchasing in a small town or village, there are no restrictions regarding the age of the property.
If you decide to buy a property in a new building, it must be at least 20-30% completed (accreditation is carried out by "Ukrfinzhytlo" JSC).
Option – Residential House
As of February 2024, amendments to the "eOselia" program have come into effect, allowing borrowers to purchase not only apartments but also residential houses and townhouses. The standard area of a residential house, for which credit is granted at a subsidized rate, must be no more than 62.5 m² of total space for one person, plus an additional 21 m² for each subsequent family member. Thus, a family of three can obtain a credit for purchasing a house with an area of up to 104.5 m² (10 m² more than when purchasing an apartment).
As reported by the Ministry of Economy, which oversees the implementation of the state program, the first deal for purchasing a private house under "eOselia" was signed on February 9, 2024 – just a few days after the program changes. The credit was taken by a family that moved to Transcarpathia at the start of the major war, purchasing a house of 82.8 m² in Uzhhorod.
When Age Matters
The requirements for the age (date of commissioning) of buildings are the same as for apartments. Private houses up to 10 years old in Kyiv and regional centers are available to certain professionals (contracted military personnel of the Armed Forces, teachers, medics, and scientists) who can take out loans at 3%, and veterans – at 7%, without restrictions in other localities. Internally displaced persons and other Ukrainians eligible for a 7% loan have access to private houses up to 3 years old, regardless of the location.
Additionally, an important condition for a private house is the land on which it is situated. The plot must exclusively belong to residential or public building lands.
The state program "eOselia" does not extend to temporarily occupied territories and areas of military conflict (periodically updated by the Ministry of Reintegration). You can check the list of such territories at the link: minre.gov.ua/wp-content/uploads/2024/03/7.perelik-nakaz-54-vid-28-lyutogo-2024.pdf
Are there limitations on housing costs?
You choose the housing you want to buy yourself, or you can use the services of a real estate agency. However, the "eOselia" program sets a maximum cost per square meter that falls under the state program.
The calculations of the Ministry of Infrastructure's so-called mediated cost of housing construction in the regions of Ukraine serve as the starting point. As of January 1, 2024, the lowest indicator was in Kirovograd region – 18,095 UAH (including VAT), and the highest – in Kyiv 24,883 UAH (in Kyiv region – 21,263 UAH).
You might say that currently, you cannot buy housing at such prices in the capital. Indeed, that is true, however, "eOselia" provides specific coefficients for different types of localities, which are used to establish the maximum (limiting) cost per square meter. Currently (after recent changes), for cities with a population of over a million (Kyiv, Dnipro, Lviv, Odesa, and Kharkiv) the ratio coefficient to the mediated cost per square meter is 2. This means, to determine the maximum price per square meter of housing in Kyiv that can be purchased through "eOselia", 24,883 UAH should be multiplied by 2. This is now the real price of real estate in the capital. Until recently, the coefficient for million-plus cities was 2.5.
Certainly, you can buy more expensive square meters and larger areas than the standard, but you will have to pay with your own funds, making the initial deposit.
The initial deposit will be covered by "eVіdnovlennia"
On February 2, 2024, the Verkhovna Rada of Ukraine adopted a bill that expands the opportunities for Ukrainians to buy new housing on credit under the "eOselia" program. For the initial deposit for housing, a certificate issued under the state program "eVіdnovlennia" can be used. The document is currently awaiting the President of Ukraine's signature and will then come into force.
We will discuss the "eVіdnovlennia" program in our next article.
Why AXIS Real Estate?
When choosing housing to buy, it is advisable to consult a real estate agency where you will be advised on the specifics of the "eOselia" program and offered the best housing options that meet your needs. One of the leaders in the capital market is the Kyiv real estate agency AXIS. Not only realtors with years of experience work, but also a selected legal team whose specialists will prepare all the documents for the transaction and ensure the legal protection of the deal. When it comes to large sums of money, it's not worth the risk – you need to be confident in the legal perfection of the contract.
How to apply?
A feature of the state program is its maximum digitization – an application for a subsidized mortgage is submitted through the "Dia" application.
For this:
- Log in to the application;
- In the "Services" menu, select "eOselia" and click "Start";
- Choose the category you belong to;
- Provide information in the application (family status, data about children, residential property, income);
- Specify details about the housing you want to purchase;
- Choose one or several banks to send your application for review;
- Certify the application with your electronic signature and send it.
Afterward, you will receive notifications from the banks about the preliminary decision regarding the loan.
What are the requirements for the borrower?
"eOselia" works with "Oschadbank", "PrivatBank", "Ukrgasbank", "Globus Bank", "Sky Bank", "Ukreximbank", and "Sense Bank".
To obtain a loan, you need to be employed and have official income. Banks lend to borrowers aged from 20 years. Your age at the date of the mortgage expiry must not exceed 65 years.
Learn more about the subsidized lending on the "eOselia" website.
The program is rapidly gaining popularity among Ukrainians. The largest number of subsidized loans were taken by military personnel under contract. Apartments on the secondary market are most often purchased. In terms of the number of homes purchased under the "eOselia" program, Kyiv region and the capital lead.
Become the owner of your dream home with AXIS Real Estate!
