The Cyprus Mortgage to Rent scheme has been well received by the island's residents.
Since the launch of the government scheme, hundreds of people have expressed their desire to participate. In particular, according to KEDIPES, which manages the project, it has received 2.5 thousand applications. About two-thirds of them (1.7 thousand) are eligible, while the rest have been rejected. Approval was given to 20 beneficiaries.
It should be noted that applications for participation in the state programme "Mortgage to Rent" can be submitted until 6 September 2024. The documents will be accepted only in paper form 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.
For more information about the project, please call 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 allowed to rent their property from the 'bad bank' for 14 years. During this period, they are charged a rent of 65 per cent 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 purchased 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.
