Cyprus Mail
Cyprus

HFC to provide new housing loans in 2-3 months

THE state Housing Finance Corporation (HFC) will start accepting new loan applications soon, perhaps within 2 or 3 months, a process interrupted following the island’s messy bailout in March.

Charalambos Siambartas, director of the company that provides preferential housing loans to low and mid-income families, said the HFC stopped accepting applications after the Eurogroup decision to seize deposits in order to recapitalise the island’s banks.

“We give loans according to the organisation’s liquidity and considering the uncertainty following the haircut on deposits, we stopped accepting new applications as a precaution,” he said.

Siambartas said the situation appeared to stabilise as deposit outflows have somewhat subsided “and we will soon go back to accepting and approving housing loans.”

He could not provide a specific date, saying this depended on the behaviour of the organisation’s depositors and their loan repayment.

“This will not happen immediately. We can say in two to three months from now,” he said.

Siambartas said the organisation’s liquidity was satisfactory and its capital adequacy very good.

However, “there is uncertainty in the banking system and we must wait to see how this situation will develop.”

The organisation’s non performing loans were around 25 per cent of all advances, he said.

The HFC was created by the state in the 80s in order to provide long-term loans to first-time buyers or to low and middle income families that owned no prior property. Traditionally, it has cooperated closely with another state-owned company, the House Development Corporation that sells small plots or small to medium sized homes in non-central urban locations and rural areas to encourage repopulation.

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