Experts assessed the program of preferential loans for residential housing developers

Market experts highly appreciated the program of preferential loans to developers working in the field of individual housing construction. The program was launched in 2023 and, according to experts, helps contractors during the transition to escrow accounts that guarantee the security of real estate purchasers' investments.

Dmitry Molchagin, managing partner of the YARCHES construction company, told Izvestia that participation in the program helped contractor companies fully fulfill their obligations during the transition period. He stressed that his company had received financing under the concessional lending program. "Bank HOUSE.The Russian Federation has done a great job for contractors," he said.

Molchagin noted the tangible benefits brought to developers by preferential interest.

"If the contractor is large, then its own working capital may not be enough to cover a large number of construction projects and business development. Therefore, when such initiatives appear, we are, of course, very happy. We have money to improve the processes in the company, and the bank's help in this matter is, of course, invaluable. About a year ago, we signed a contract for 50 million, then we expanded the credit line to 100 million. Due to the turnover, due to the fact that this is a revolving credit line, it allows us to work, stay afloat and fulfill all obligations. This is a unique program that I, of course, recommend to all market participants," the expert said.

As noted in the DOM Bank.In December of this year, the period when residential housing contractors with escrow can open a credit line on preferential terms will end.

Given the approach of the winter season, which restricts construction, market participants are trying to get cheap money from banks and invest in the business in advance — before the beginning of November, the bank noted.

Denis Vasiliev, commercial director of the SVOD-STROY contracting company, pointed out that the 1% interest rate creates "excellent conditions" for developers.

"We actually take the money almost for free, which allows us not to include interest costs in the cost of houses. There is still an opportunity to receive financing on such terms by the end of December, but given the completion of the active construction season, it is important to hurry up and close the financing issue in October," he stressed.

The subsidy program has made it possible to create an updated residential housing market in the Russian Federation: transparent, civilized and with clear "rules of the game," the general director of the Rating Agency of the Construction Complex (RASK) told Izvestia Fyodor Vylomov.

"Taking into account the rather rapid transition to escrow accounts and project financing, such a support measure allowed small contractors who had no previous experience working with these tools to adapt in a short time. As a result, tens of billions of project financing have been provided, and support for the construction of more than a million square meters of housing. In turn, the banks were able to work out mechanisms for monitoring the progress of projects, as well as the disclosure of escrow accounts upon completion and acceptance," said Vylomov.

The head of RASK admitted that, taking into account the achieved positive effect, the program may be extended after the end of 2025. However, Vylomov drew attention to the fact that in case of cancellation of the preferential lending program, "the cost of project financing will approximately increase to 6-9%, in some cases — up to 12% (depending on the project, contractor and other parameters)."

"Unlike project financing in the MCD market, in the case of residential housing, the escrow account is filled immediately, rather than gradually, with a margin covering the amounts allocated to the contractor for construction. As a result, with such collateral, the rate can be much lower than the market rate, and immediately at the start of construction. In addition, the construction time of a private house in most projects is up to a year, this is a short—term credit line," the expert said.

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