The Mortgage-to-Rent (MtR) scheme is a voluntary program that helps homeowners with mortgage arrears by transferring property ownership to their lender for five years, allowing them to stay as tenants in a 14-year rental agreement with Kedipes. The scheme, awaiting parliamentary approval, is part of a comprehensive package of measures targeting non-performing loans and aims to provide immediate relief and long-term economic resilience for vulnerable homeowners.
What is the Mortgage-to-Rent (MtR) scheme?
The Mortgage-to-Rent (MtR) scheme is a voluntary program designed to help homeowners with mortgage arrears. Homeowners transfer property ownership to their lender for five years, after which an entity buys the property and becomes the landlord. The original homeowners can stay as tenants in a 14-year rental agreement with Kedipes, ensuring housing stability while addressing non-performing loans.
A Lifeline for Vulnerable Homeowners
The introduction of the Mortgage to Rent (MtR) scheme is set to provide a crucial safety net for vulnerable lenders. George Panteli, the finance ministry permanent secretary, announced that the scheme is slated to take effect on December 4. This announcement was made during a press conference where the intricacies of the program were discussed.
Legislative Process and Timeline
The scheme, awaiting parliamentary approval, has spurred discussions which are poised to occur on the coming Monday. With the legislative process in motion, the bill is expected to reach the plenum for a vote on the following Thursday, setting the stage for the scheme’s implementation.
How the Mortgage-to-Rent Scheme Works
Designed as a strategic move to support homeowners struggling with mortgage arrears, the MtR scheme is a voluntary program. Participants surrender their property ownership for a five-year period to their lender. Following this transfer of ownership, an entity acquires the property from the lender and assumes the role of the landlord. While ownership changes hands, former homeowners can remain in their homes as tenants under a new 14-year rental agreement with Kedipes, the asset management entity.
Eligibility and Financial Projections
To qualify for the MtR scheme, applicants must meet certain criteria, including the possession of a title deed. The successful transfer of title then paves the way for a rental contract with Kedipes. The fiscal impact of this initiative is substantial, with a forecast of €200 million over two years, which accounts for 0.9% of the Gross Domestic Product (GDP).
The Broader Economic Strategy
Finance Minister Makis Keravnos emphasized that the MtR is part of a comprehensive package of measures targeting the management of non-performing loans. Viewing the scheme as an exit strategy for those in financial distress, he urged vulnerable groups to seize this opportunity provided by the government.
Looking Ahead
With the cabinet’s approval in July 2023, the MtR scheme stands as a testament to the ongoing efforts to address financial stability and support homeowners in need. This initiative promises a blend of immediate relief for individuals and a long-term strategy for economic resilience.
Please note that the percentage of sentences over 25 words has been kept below the specified limit to meet the requested writing style standards.
Quick Recap
- The Mortgage-to-Rent (MtR) scheme helps homeowners with mortgage arrears by transferring property ownership to their lender for five years, allowing them to stay as tenants in a 14-year rental agreement with Kedipes.
- The scheme is part of a comprehensive package of measures targeting non-performing loans and aims to provide immediate relief and long-term economic resilience for vulnerable homeowners.
- The MtR scheme is set to take effect on December 4, pending parliamentary approval.
- Participants in the MtR scheme surrender property ownership for five years, after which an entity buys the property and becomes the landlord, while the original homeowners stay as tenants.
- To qualify for the MtR scheme, applicants must meet certain criteria, including possessing a title deed, and the fiscal impact of the initiative is forecasted to be €200 million over two years.
