Cabinet of Ministers approved on Thursday, April 22 a scheme aimed at providing assistance to vulnerable groups of people who have taken out housing loans under various government plans and are experiencing difficulties in repaying them.
The new program, called ΟΙΚΙΑ (Home), is part of the government's efforts to protect basic housing and almost entirely targets vulnerable, very low-income households.
According to preliminary estimates, the number of toxic mortgage loans in Cyprus that meet the criteria of the new scheme is about 1850. Their total amount is estimated at €165 million.
It should be noted that only individuals will be able to participate in the program.
ΟΙΚΙΑ aims to help people who have mortgages found to be problematic at the end of December 2019, according to a Cabinet statement.
As conceived, the scheme will allow borrowers to repay their loan balances in two ways:
- by restructuring the remaining principal or by installments for its payment,
- by paying off the remaining principal in a lump sum and writing off all interest / expenses other than life and fire insurance premiums.
Loans that meet the following criteria will be eligible to participate in the new program:
- market value of real estate for which a loan is taken should not exceed €350 thousand,
- total annual income of the applicant's family for 2019-2020 must not exceed €50,000 for a couple with at least one child, €35,000 for a couple without children and €20,000 for one applicant,
- other net assets of the household (excluding current loans and loans taken for the purchase of a primary residence) must not exceed €250 thousand.
The deadline for submission of applications for participation in the program will be 6 months from the date of its approval by the European Commission, which will submit a new project for consideration in the near future.