The Central Bank of Russia has issued a recommendation for credit institutions to support borrowers whose individual housing construction projects have been derailed by unscrupulous contractors, including through debt restructuring. The measures target cases where a household took out a mortgage for an individual build and the bank transferred funds to the contractor, but construction was not started or completed. Banks are advised to assess cases individually, considering the borrower’s economic situation, social status, and whether they have other housing. Based on this assessment, lenders may restructure the debt by keeping the interest rate unchanged despite the house not being built, deferring repayments, waiving fines, and, in difficult situations, partially or fully writing off the debt.
Central Bank of Russia 2025-04-22
Central Bank of Russia recommends banks restructure mortgages for borrowers harmed by failed individual housing construction contractors
The Central Bank of Russia recommends credit institutions support borrowers affected by incomplete individual housing projects due to unscrupulous contractors, including through debt restructuring. Banks should assess each case individually, considering the borrower's economic situation and social status, and may offer measures such as unchanged interest rates, deferred repayments, waived fines, or debt write-offs.