On Sunday, December 5, the Cyprus Ministry of Finance announced that soon debts totalling 23.2 million euros will be written off to support socially vulnerable borrowers.
The project budget is 50.6 million euros, of which 27.3 million euros will be financed by the House Finance Corporation (HFC), and 23.3 by the EU.
At the same time, according to the estimates of the Ministry of Finance, 1,850 loans (165 million euros) are eligible to participate in this program. It is expected that potential applicants for participation in the program will be informed about this by the HFC in the near future.
The Cyprus plan for partial debt cancellation for socially vulnerable borrowers who took out loans using the old support program introduced before Cyprus joined the EU was approved in August 2021.
The old program was launched to support vulnerable and low-income people who do not have property, as well as for households with special social characteristics. The loans were issued through a government intermediary, the Housing Finance Corporation (HFC). Due to certain terms of the agreements, the borrowers were not eligible to participate in the ESTIA program, which was approved in 2018.
The new scheme provides beneficiaries with the opportunity to continue to repay the remaining loans they took on real estate by:
- restructuring of the remaining debt, resulting in a decrease in interest rates, an increase in the repayment period and/or a change in the identity of the borrower or guarantor;
- full and immediate repayment of the remaining debt with cancellation of all unpaid interest, except for insurance premiums.
By the way, the remaining debt means the amount that consists of the initial loan amount, the life insurance contribution and fire insurance, minus the borrower's payments before the settlement date or repayment based on this plan.
Loans that meet the following criteria are allowed to participate in the program:
1. The market value of the borrower's main place of residence does not exceed 350 thousand euros.
2. The total annual income of the applicant's family for the period from 2019 to 2020 should be no more than:
- 50 thousand euros - for a married couple with at least one child;
- 35 thousand euros - for a married couple without children;
- 20 thousand euros - for a single person.
3. The remaining net assets of the household, with the exception of the main place of residence (i.e. the assets of the household, with the exception of the main place of residence, minus the current credit line, with the exception of the loan secured by the main place of residence), should not exceed 250 thousand euros.
Note: a family is a married couple and minor children on the reporting date, that is, December 31, 2019.
Applications for participation in the program are accepted until February 28, 2022. For more information about the scheme, please call 22503333. It is proposed to fill out the application on the website of the Cyprus Ministry of Finance.
If you are looking for a property in Cyprus, then contact DOM. The website has a large selection of real estate - residential and commercial. Experienced agency specialists will be happy to help you make the right choice.