Panayiotis Rougalas
The “Rent Instead of Installment” scheme, also known as “Mortgage to Rent,” has reopened, allowing more borrowers to apply.
In the latest window opened by the government as part of wider efforts to improve the foreclosure framework, 180 borrowers had submitted applications by last Friday, according to information available to K. However, 40% of those applications have already been rejected, while 111 are still under review.
Sources estimate that by the end of July 2026, total applications are unlikely to exceed 500.
Applicants still have about one and a half months left to apply, with sources within KEDIPES noting that a rush of last-minute applications is expected close to the July 31 deadline, “because that’s the Cypriot culture,” as they put it.
Since the scheme was first launched, 3,340 applications were submitted in its initial phase. After its reopening, the total has now reached 3,520. In the first phase, 1,147 applications were approved, with 697 properties already transferred to KEDIPES, which now owns them.
The reopening of the scheme was part of the government’s response to long-standing calls from Parliament to strengthen the foreclosure framework. Alongside two legislative packages boosting the powers of the Financial Ombudsman, the government relaunched the scheme, which had not achieved the expected success rate in 2024.
Sources estimate that by the end of July 2026, total applications are unlikely to exceed 500.
Under the scheme, properties worth €72.7 million have been acquired, of which €28.2 million comes from the KEDIPES portfolio and €44.5 million from banks and credit acquisition companies. At the same time, KEDIPES reported rental income of €1.6 million for the first quarter of 2026, up 69% from the previous quarter and 89.4% year-on-year. This figure includes €0.8 million in state subsidy payments related to the scheme.
Despite the reopening, eligibility criteria have not changed, meaning access is neither easier nor harder. The scheme applies to non-performing loans secured by primary residences with a market value of up to €250,000.
Eligible applicants include individuals receiving specific state benefits, as well as borrowers deemed eligible but not viable for other restructuring schemes such as ESTIA and HOUSING, which cover homes up to €350,000. It also includes borrowers whose participation in those schemes was previously terminated.
A 2024 cabinet decision further expanded eligibility to two smaller categories linked to ESTIA: borrowers whose lenders did not participate in the scheme and approved applicants whose plans were not completed due to unresolved property charges.
Following approval by the European Commission’s Directorate-General for Competition, a technical assessment and property valuation are carried out. KEDIPES then acquires the primary residence, paying around 65% of its market value to the participating bank or credit company.
The remaining loan is written off by the lender to the extent not covered by other collateral, while legal charges on the property are cleared according to predefined limits. The Republic of Cyprus pays KEDIPES rent equivalent to 65% of market rental value.
The former owner becomes a tenant for 14 years, or for life if over 65. Tenants also have the right to repurchase the property after five years and before the end of the 14-year period at a predetermined price set in the rental agreement.
That repurchase price takes into account factors such as property price movements, costs, and rental payments and is designed to remain competitive.
The scheme was approved by the European Commission’s competition authorities and later by the Cabinet on July 12, 2023. KEDIPES is responsible for implementation following adjustments to the framework allowing it to acquire and manage primary residences outside its existing portfolio, as well as enabling delayed state support payments to cover acquisitions and scheme costs.
