The government program for contract officers and senior warrant officers allows you to purchase or build a home in Armenia with minimal financial burden — thanks to a special state support initiative. It offers two types of assistance:

1. Subsidizing the mortgage interest rate
2. Partial coverage of the loan amount (including the down payment)

Additionally, military personnel, like all other citizens, are eligible for personal income tax refunds, which further reduces the real financial burden on their family budget.

In this article, we explain how the program works, who can participate, and how to take advantage of it to save up to 35 million AMD on a real estate purchase.

Many Armenian banks participate in this government program, offering various mortgage conditions and rates.

To choose the most convenient and beneficial bank for your mortgage, you can use the AFM platform.

Here you’ll find up-to-date offers from different banks, making it easy to compare conditions, interest rates, and additional benefits.

Add AFM to your bookmarks to always stay informed about the best available conditions under the program.

Look for the top deals in the "Mortgage" section, use the mortgage calculator to estimate overpayments, and select the options that best match your financial situation.

AFM will help you save time and money by providing all the tools needed to make an informed decision.

What Is Mortgage Interest Rate Subsidization?

Mortgage interest rate subsidization means that the government covers part of your loan’s interest expenses. In other words:

1. The bank sets a market mortgage rate, for example, 13% per annum.
2. The government subsidizes 4% of the rate, easing your financial burden.
3. Your mortgage rate effectively becomes 9% because the government covers the 4%.

You pay your mortgage at 9%, and you may further reduce your costs later by using the tax refund program.

As a result, the effective mortgage rate for the borrower can be as low as:

1. 0% when purchasing a newly built property
2. Around 4–5% when purchasing property on the secondary market

Important:

The initial interest rate set by the bank depends on many factors, including the Central Bank’s key rate, developer partnership programs, the size of your down payment, and other conditions.

What Is Partial Loan Repayment?

Partial loan repayment means that the government covers not the interest, but a portion of the principal loan amount, thereby reducing the amount you need to borrow from the bank.

For example:

1. You plan to take out a mortgage for 25 million AMD, and you have 5 million AMD available as a down payment.
2. The government can contribute up to 2.5 million AMD toward your initial down payment.
3. As a result, you would only need to borrow 17.5 million AMD from the bank, instead of 20 million AMD as originally planned.

This approach reduces the total loan amount, meaning the bank will charge interest on a smaller sum, and your future monthly mortgage payments will also be lower.

In some cases (such as for exemplary military service), additional compensation toward the principal loan amount may be granted.

However, such benefits are processed separately — initiated by the relevant ministry or department — and are not part of the basic program.

Thus, this mechanism primarily helps those who:

1. Do not yet have sufficient funds for the full down payment, or
2. Want to reduce their total debt burden from the very beginning.

How Does Interest Rate Subsidization Differ from Partial Loan Repayment — and Which Is More Beneficial?

1. Interest Rate Subsidization means the government covers part of your mortgage interest payments.
2. Partial Loan Repayment means the government covers part of the principal loan amount, for example, fully or partially assisting with the down payment.

Which one should you choose?

If you already have the minimum required down payment for mortgage approval, it’s usually more advantageous to choose interest rate subsidization, especially if:

1. The property costs more than 20 million AMD, and
2. You are taking a mortgage over a long term.

In such cases, you could save approximately 11,540,000 AMD in interest payments compared to the partial repayment option.

If you have not yet saved enough for a down payment, the government’s contribution of 2.5 million AMD could provide essential support, helping you move into your own home sooner.

Additional Benefit: Income Tax Refund Program

How Does the Income Tax Refund System Work in Armenia?

The government refunds 100% of the income tax withheld from the military servicemember’s salary and automatically directs these funds toward repaying the principal mortgage amount.

In other words, the 20% tax that is normally deducted from your salary is not sent to the state budget — it is used to reduce your mortgage debt early.

This benefit remains active for the entire duration of the servicemember’s contract and helps significantly shorten the overall loan repayment term or reduce the monthly financial burden.

What Are the Specific Advantages for Military Personnel?

The program can save you hundreds of thousands of drams each year, especially when purchasing newly built properties.

Let’s compare:

Suppose you want to purchase a newly built apartment for 25 million AMD over 20 years.

Regular mortgage scenario:

1. Interest rate: 13%
2. Monthly payment: approximately 298,000 AMD
3. Total overpayment over 20 years: approximately 46.5 million AMD

Under the government program:

1. 4% of the interest rate is subsidized by the government
2. Additional overpayment (~up to 9%) is refunded through your income tax
3. Effective interest rate reduces to 0–4%, depending on your salary
4. Monthly payment could range between 165,000–220,000 AMD
5. Total overpayment over 20 years: approximately 10–20 million AMD

Total Savings Over the Loan Term: 25–35 Million AMD

Moreover, since part of your payments is covered by your refunded income tax, you effectively overpay minimally — or almost not at all — gradually paying down the apartment's cost.

Who Is Eligible for the Program?

The program is available to:

1. Contract officers of the Ministry of Defense of Armenia
2. Senior warrant officers
3. Employees of the National Security Service of the Republic of Armenia (NSS), Police, and Penitentiary Service (within allocated quotas)

Be sure to check with your department whether quotas are currently available and what documents you need to apply.

What Are the Loan Conditions?

1. Maximum loan amount: 25,650,000 AMD (approximately $65,000)
2. Loan term: up to 20 years
3. Property type: apartment or private house (including new construction)
4. Market: primary (newly built properties) and secondary

If you purchase a newly built property, the conditions are the most favorable — the effective rate can be close to zero.

When buying property on the secondary market, the rate after subsidies and tax refunds is around 4–5% per annum.

How to Apply for a Mortgage Under This Program?

1. Ensure You Meet the Eligibility Requirements

1. You must be a contract military servicemember.
2. You should be able to confirm your service status through your personal account or military office.

2. Choose the Property

1. Both new constructions and secondary market properties are eligible.

3. Submit a Mortgage Application

1. Choose a bank that participates in the government program (almost all major banks participate).
2. Provide the required documents, including income certificates, passport copies, service confirmation, etc.

4. Receive Approval and Sign the Agreement

1. The bank will issue the mortgage considering the applicable subsidies.
2. The government will transfer the subsidy directly to the bank.

5. Apply for Income Tax Refund

1. Submit the necessary documents to the tax office to start receiving the income tax refund.
2. The refunded amounts will be automatically applied toward your monthly mortgage payments.

What Documents Are Needed to Participate in the Program?

To apply for a mortgage under the government program, you will need standard documents as well as some specific confirmations.

Here’s an approximate list:

1. Passport and Social Card or ID Card
2. Income certificate (for the last 6–12 months)
3. Service confirmation letter — proving contract military status
4. Command approval for program participation (if required)
5. Property documents — purchase agreement, cadastral data, etc.
6. Application for program participation (processed through the bank)
7. Documents confirming the down payment (if partially covered by the government)
8. Bank forms, applications, consent for data processing

Important:

The final document list may vary depending on the bank.

It is highly recommended to check it in advance.

Tip:

Prepare two copies of all documents and ensure they are up-to-date (especially income and service certificates, as they usually remain valid for 10–30 days).

What Are the Program Limitations?

1. The program is available only for active contract servicemembers.
2. The property must be located within Armenia.
3. The down payment subsidy is limited to a maximum of 2.5 million AMD.
4. Support depends on available government budget financing and may be suspended if funds are exhausted.

Are There Time Limits for the Program?

The program was adopted on August 22, 2019 (Government Decree No. 1091-Ն).

There has been no official announcement regarding its end, but:

1. The government may amend or terminate the program at any time.
2. The terms and conditions may change (for example, related to rates, loan amounts, or eligible participants).

What Happens If the Program Ends?

1. If you have already secured a mortgage through the program — your conditions remain unchanged.
2. New applications may no longer be accepted.
3. New programs with different conditions may be introduced.

Possible Changes Starting From 2025: How Will They Affect the Program for Military Personnel?

From January 1, 2025, several changes to Armenia’s income tax refund system for mortgages came into effect, which may impact contract service members participating in the program.

Key updates include:

1. Reduction in the maximum refundable amount — instead of 1.5 million AMD per quarter, only up to 750,000 AMD per quarter can now be refunded.
2. This significantly lowers the annual amount of tax compensation.
3. Income tax refunds will no longer be available in Yerevan, except for apartments in buildings that received construction permits before January 1, 2022.
4. Gradual restrictions will be applied to other regions:
5. From 2027 — in Ararat, Armavir, Aragatsotn, and Kotayk provinces.
6. From 2029 — throughout Armenia, except for border settlements.

This means that for new applicants after 2025, program conditions may become less favorable:

It may be harder to use tax refunds and lower the mortgage rate to 0–4%.

However, if your mortgage is approved before the changes take effect, your favorable conditions will be locked in for the entire loan term.

Recommendation

Do not delay submitting your application:

By acting now, you can still benefit from the current favorable program structure and maximize your savings.

Conclusion

The Government Support Program for Military Personnel is a unique opportunity to purchase a home on favorable terms.

The initiative offers two main forms of assistance:

1. Interest rate subsidization — the government reduces the burden of monthly mortgage payments.
2. Partial loan repayment — helps cover the down payment and reduce the principal loan amount.

Additionally, the income tax refund system is available, allowing you to further lower your overpayment or even fully offset the interest rate.

Thanks to these tools, you can:

1. Buy property without overpaying;
2. Get an effective interest rate starting from 0% when purchasing new construction;
3. Save up to 30–35 million AMD over the full loan term;
4. Receive support not only for interest payments but also for the down payment.

Important:

The program may be adjusted in the future.

Make sure to apply early — after the program ends, new applications will no longer be accepted, although existing participants will keep their favorable conditions.

Final Takeaway

If you are a contract military servicemember planning to buy or build a home, this program is your chance to obtain property with minimal overpayment and maximum government support.

You can find a complete overview of all mortgage programs with government support on our platform.

Find the best mortgage offers and get assistance with the application process at AFM — simple, clear, and without unnecessary costs.