The green light for the Estia scheme to help home owners pay off loans is expected to be given in the next couple of weeks after the legal service signed off on the contracts to be signed with finance organisations.
According to the Cyprus News Agency, the legal service has sent the files back to the finance ministry and it is expected that Finance Minister Harris Georgiades will submit the scheme for final approval at one of the next two meetings of the council of ministers.
The participating institutions will then sign an agreement with the relevant state body, allowing the agreement to be implemented.
The state will meet one third of the payment for those on the scheme throughout their revised payment plan on the condition that the person who took out the loan will pay the other two thirds. The state will pay this amount at the end of each year once the finance institutions confirm the rest of the payment has been met.
ESTIA is expected to assist the repayment of primary home loans that were not serviced at the end of September 2017. Based on initial estimates, the gross value of eligible loans is €3.4 billion, with the total cost for the state at 25 years of project life cycle €815 million or 4% of GDP.
The Bank of Cyprus, Hellenic Bank, Astrobank, Alpha Bank and the Housing Finance Corporation are expected to take part in the scheme.
The purpose of Estia is to assist, support and protect vulnerable households who have mortgaged their houses for their loans.
To be eligible, a household must have a declared gross income of €50,000, and their primary residence which is mortgaged must have a maximum market value of up to €350,000.