Mortgage-to-rent scheme a favourable arrangement, Hellenic Bank says

Hellenic Bank on Tuesday released a statement welcoming the recent launch of the mortgage-to-rent scheme, which went into effect on December 4, 2023, describing it as a favourable way for eligible borrowers to settle their loan obligations.

The scheme has already recorded massive interest, according to statements made by state-owned asset management company Kedipes, the organisation charged with the implementation of the scheme.

“We welcome this plan as a favourable arrangement, ensuring housing for vulnerable households,” Hellenic Bank interim Chief Executive Officer Antonis Rouvas said in a statement.

“Those who have loans with Hellenic Bank, and who meet the criteria or wish to confirm their eligibility under the plan, are encouraged to contact Kedipes at their earliest convenience for further information and to submit the required application,” he added.

Under the mortgage-to-rent plan, homeowners facing property loss due to mortgage debts surrender their homes for five years to their lender.

The state-owned Kedipes entity buys the property, becoming the landlord, and tenants retain the residence.

Applicants meeting the criteria, and having a title deed, transfer it to Kedipes, who signs a 14-year lease while the state covers the rent.

Former owners or relatives may repurchase the property after five years at a price accounting for property changes, expenses, and rentals.

The eligibility covers loans securing residences up to €250,000 and certain beneficiaries, plus borrowers with homes valued up to €350,000, previously excluded from housing schemes or whose participation expired.

In its statement, the bank further clarified the three core groups eligible for the plan.

The categories of loan recipients eligible for the scheme include recipients of social benefits, such as single parents, large families, people with low pensions, and recipients of disability pensions, among others, who had non-performing loans as of December 31, 2021, and which remained non-performing as of December 31, 2022. This category can safeguard a primary residence with a market value of up to €250,000.

In addition, also eligible are applicants under the Estia and Oikia housing schemes, assessed as eligible but deemed unsustainable, with a market value of their primary residence up to €350,000.

Finally, the scheme can also include all applicants under the two aforementioned housing schemes, initially approved for inclusion but subsequently removed.

It should be noted that the scheme was also welcomed by the Cyprus Borrowers Association (Syprodat), which urged all eligible borrowers to seriously consider applying to the scheme in order to “seize the opportunity that it presents”.

What is more, the president of Kedipes Lambros Papadopoulos also expressed satisfaction with the positive response to the scheme so far.

Additionally, he urged eligible borrowers “to seriously consider this opportunity offered by the scheme, as it provides a very favourable settlement for their non-performing loans”.

For further details, interested parties can visit Kedipes’ website at www.kedipes.com.cy.