Finance Minister Harris Georgiades on Sunday urged any homeowners who believe they are eligible for the debt-relief scheme Estia to submit their applications as of Monday.
Speaking after a memorial event, Georgiades said: “Now is the time for every borrower who has difficulty paying off their mortgage to submit their application.”
The labour ministry will start taking in applications from Monday. Based on information from the banks, they expected about 15,000 applications to be submitted but that eligible applicants would likely not number more than 10,000.
The stated purpose of Estia is to assist, support and protect vulnerable households who have mortgaged their primary residences houses for their loans and at the same time reduce the high number of bad debts.
It applies to loans (mortgages) that were deemed non-performing on September 30, 2017. Loans designated as non-performing after that date are not eligible. The primary residence which is mortgaged must have a maximum market value of up to €350,000.
The Estia scheme applies to the first mortgage on a residence, and covers loans or credit facilities regardless of currency.
Total household income of the applicant must not exceed the following: €60,000 for a family with at least four dependents; €55,000 for a family with three dependents; €50,000 for a family with two dependents; €45,000 with one dependent; €35,000 for a couple with no children, and €20,000 for a single-member household.
The Estia criteria will also apply to single-parent families.
An applicant’s other net assets in 2016, 2017, and 2018, must not exceed 80 per cent of the market value of the main residence after its evaluation.
In any case they should not exceed €250,000.
Any cash or deposits exceeding €10,000, or 20 per cent of the rest of the applicant’s net assets, whichever is higher, and which are not used to secure any other loans, must be paid towards the non-performing facility before the restructuring procedure.
Other terms and conditions also apply.
The loans will be written down to the market value of the primary residence and then the borrower will have to pay two-thirds of the rescheduled loan every month and the taxpayer (the state) is going to subsidise one-third of the monthly instalments on that rescheduled loan.