Due to the great interest of the Cypriot population, the government has decided to extend the acceptance of applications for the state programme 'Mortgage to Rent' until 31 October 2024.
This was announced by the Finance Ministry on Friday 4 October.
According to the ministry, interested parties can submit documents electronically on the website kedipes.com.cy. In addition, paper applications will be accepted at the KEDIPES offices at the following addresses:
- 7 Grigori Afxentiou Street, Nicosia, 1096;
- 97 Gladstonos Street, Oasis Complex, Block E, 3rd Floor, Limassol, 3032;
- 5 Giorgos Christodoulidis Street, Larnaca, 6041;
- Kinira and Koriou Junction, 7, 4th floor, Paphos, 8011;
- Griva Digeni Street 4, Paralimni, 5281.
Beneficiaries can obtain further information by calling the reference number: 22 743400.
As a reminder, the Mortgage to Rent scheme covers overdue loans secured on a principal residence up to 350,000 euros.
Beneficiaries are people belonging to low-income groups and pensioners, whether or not they have applied to join the ESTIA and Oikia schemes.
The programme is also open to borrowers who have defaulted on their mortgage, but whose application to join the ESTIA and Oikia schemes has been rejected because they were deemed unviable due to their low income.
A separate company, KEDIPES EED Ltd, has been set up to administer the new scheme and maintain separate accounting records, including a fixed asset register. As part of the scheme, arrangements have been made to insure the properties that will come into the ownership of KEDIPES. Call centres and service points have been opened in five towns in Cyprus, staffed by qualified personnel who are available to answer questions from the public and those interested in participating in the scheme.
KEDIPES' main function under the Mortgage for Rent scheme is to purchase non-performing loans and other high-risk assets from Cypriot financial institutions.
By transferring non-performing loans to the balance sheet of a "bad bank", the Cypriot banking system will be able to rid itself of €10 billion of toxic debt. In turn, small borrowers will be less vulnerable to foreclosure of their primary residence if they default on their loans, as they will be able to participate in the mortgage-to-rent programme.
The idea is for KEDIPES to buy mortgages from debtors. The troubled borrowers are then given the opportunity to rent their property from the 'bad bank' for 14 years. During this period, they are charged rent at 65% of the market average. At the end of this period, they can get the property back if they pay the arrears. The current price of the property for borrowers in arrears is equal to the price at which KEDIPES bought the property, less the rent paid over 14 years. If the borrower is unable to repurchase the property, for example due to lack of funds or death, his next of kin are entitled to do so under the same conditions. Finally, if the conditions of the scheme are not met, KEDIPES can sell the property at its discretion after 14 years.
