A new stage of affordable mortgages has been launched in Ukraine: now the state compensates for 70% of the down payment, 70% of monthly payments throughout the year and provides up to 40 thousand. UAH for paperwork. The program is designed to support internally displaced persons (IDPs) and residents of front-line areas.

It looks like the state is finally extending its hand to those who have lost their homes. But if you look closely, this hand is holding a loan agreement. There is something deeply contradictory in this “gesture of support”, even if formally it looks humane - a person who has lost a house is offered to buy a new one, but on credit.

IDPs are not always borrowers with predictable income. These people have lost everything - housing, stability, jobs, documents. They need a roof, not debt. Even if the state pays part of it, the rest will become their burden for all subsequent years from obligations that will fall on financially insolvent people.

Social policy has been replaced by credit, and charity by financial marketing. If a person without a roof over his head is given not a house, but a loan, then he will continue to live in the rain, only now with debt. Therefore, offering IDPs a loan instead of grant housing is like offering a drowning person to lease a boat.

Not help, but an illusion.

Money from the budget does not go to housing, but to the capital of PJSC “Ukrainian Financial Housing Company” (Ukrfinzhilye), which, through banks, provides loans for the purchase of unfinished housing, thereby actually financing developers. By spending budget money not on housing, but on partial compensation and interest on loans to “homeless” people, in reality the state finances banks and developers, not people.

Another hidden risk is that most loans under the program are issued not for finished housing, but for construction. That is, the migrant actually becomes an investor in the developer, taking out a loan for a facility that is just about to be built for him.

This scheme is not just risky - it is doubly dangerous..

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Formally, the Yoselya program looks simple: a person receives a loan for housing that is still under construction. But in fact, he does not buy a finished apartment, but finances the developer. This means that the borrower becomes a participant in the risk of the development project without any guarantees that the housing will actually be completed, put into operation and registered in its name.

At first glance, government compensation of 70% of the down payment and 70% of monthly payments looks like significant help to displaced people. In fact, firstly, this is a recognition that even the minimum contribution of half a million hryvnia is unaffordable for the majority of Ukrainians. And secondly, with a closer acquaintance with the situation, the help is not so generous.

Let's count together. According to Ukrfinzhilya, the average cost of an apartment is UAH 2.35 million.

Thus, the borrower’s own contribution of 20% is 470 thousand. UAH;

Loan - UAH 1.88 million for 20 years at 7% per annum.

Respectively:.

the amount of compensation from the budget (including 70% of the first payment + 70% of the first annual payments) will be 484,809 UAH;

total amount paid by the borrower (own contribution + all interest - compensation) - 3,186,674 UAH.

That is, in reality the state covers approximately 13% of the total cost of housing, the rest falls on the shoulders of the borrower.

It’s simple, at first the program was created not for those who lost their homes, but for those who have a guaranteed salary from the budget - police officers, prosecutors, judges, officials. It was they who became the first borrowers, and even received a “non-public preference” - not to explain where they got the funds for their own contribution.

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Thus, the budget finances the same people twice: first through salaries, and then through mortgage programs at non-market interest rates. The program, which was supposed to become an instrument of justice, turned into a mechanism for supporting state employees and developers.

Now, in order to maintain the social facade, the state is compensating the displaced for what they were unable to contribute anyway.

Risks that aren't talked about.

Despite the fact that compensation of 70% of monthly payments for displaced people looks like a generous gesture from the state, in fact it is a social bait used to lure people into loans for housing that does not yet exist. Because most agreements are concluded not for finished apartments, but for participation in the financing of developers. For families who have lost their homes, this is not a chance, but a double risk: a mortgage taken out for future concrete can turn into debt without housing.

Compensation is valid for only one year. Then comes the shock of the second year, when payments will triple, and the developer may not yet put the house into operation. The apartments were sold, the loan remained, but the program was completed “successfully”. Thus, social mortgages turn into a mechanism for pumping budget funds into construction companies, and not into the path of IDPs to much-needed housing.

Construction may stop due to lack of financing, corruption, war risks or bankruptcy of the contractor. The contract does not guarantee an apartment, but only the right to receive it in the future, which is very weakly protected in the legal field.

The bank is not responsible for the quality or completion of construction - it only lends money to the buyer and does not guarantee the reliability of the developer, especially since construction insurance is formal or there is no insurance at all. Thus, a person takes on debt for unfinished property, which may remain on paper.

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If a construction company goes bankrupt, freezes construction, or simply disappears, no compensation will return either money or housing to the person. But the bank will receive a mortgage collateral (unfinished construction), the developer will receive financing, and the state will receive a report on a successful program.

In a country where the construction industry still remains a zone of “shadow”, double sales and frozen objects, this turns affordable mortgages into another experiment at the expense of the most vulnerable.

Real support is not a subsidized illusion, but a market where housing is built and sold transparently, without government traps.

What should the state do.

If lending is still directed to new construction, then:.

developers must undergo strict state accreditation selection based on the criteria of reputation, financial viability, proper audit and guarantee of completion;

Borrowers' funds must be kept in escrow accounts until construction is completed;

banks should join in financing construction, and the state should act as a guarantor of completion or an insurer of the risk of unfinished construction;

For IDPs, it is more logical to create guaranteed housing funds, where the state or municipality is the customer, or a system for purchasing finished housing on the secondary market with subsequent transfer to IDPs;

provide grants for the creation of rental housing funds, including with the right to purchase. Create conditions for attracting investment in this area through tax incentives and provision of equipped plots for construction.

In this case, the state invests in a real asset - finished housing, and not in future square meters on paper. Without this, affordable mortgages for IDPs turn into a pre-payment lottery, in which developers and banks win, but not those who really need housing.

The state must take on social responsibility, not financial convention, shifting the burden of financial risk onto the shoulders of the individual. Because a mortgage is not a tool for survival, but a tool for development. Where housing is destroyed, money is not lent - it is invested in reconstruction.

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