Starting December 4, the government, in collaboration with KEDIPES, opens applications for the innovative 'Rent-to-Own' scheme. This initiative aims to fully settle loans secured on the main residences of eligible households, offering a lifeline to those facing financial challenges.
The application window spans nine months, providing ample time for interested parties and those struggling to repay debts to participate. The state allocates approximately 200 million euros over the next two years to support the program, managed by KEDIPES, which targets around 2,500 households.
While the goal is to involve all potentially eligible households, historical data suggests a realistic target of one in three. Notably, the project has received approval from the European Commission's Competition Directorate General.
Key aspects of the scheme include:
1. Eligibility Criteria: The scheme is for Non-Serviced Loans secured by a Main Residence with a Market Value of up to €250k.
2. Beneficiaries: Individuals in receipt of specific benefits and non-viable borrowers eligible for the Home Scheme with Main Residential Properties valued up to €350k.
3. Assessment Process: A technical suitability check and property value assessment are conducted.
4. Financial Transaction: KEDIPES acquires the main residence, paying the participant (Bank or Credit Acquisition Company) about 65% of the market value.
5. Debt Write-Off: The participant writes off the remaining credit facility not covered by other collateral.
6. Encumbrance Elimination: Prior elimination of encumbrances on the Principal Residence within predetermined percentages.
7. Rent Payment: The Republic of Cyprus pays rent to KEDIPES, amounting to 65% of the market rent.
8. Tenant Status: The landlord becomes a tenant with a lease term of 14 years or for life if the tenant is over 65 years of age.
9. Repurchase Option: After five years and before the 14-year mark, the tenant has the right to repurchase the property at a predetermined price, considering various parameters like property price changes, costs, and rent payments.
This groundbreaking 'Rent-to-Own' initiative offers a strategic approach to address housing challenges, providing financial relief to vulnerable households while promoting sustainable homeownership.
[This article was translated from its Greek original]