The new mortgage-to-rent scheme in Cyprus allows vulnerable homeowners facing foreclosure to transfer home ownership to Kedipes and rent it for 14 years, with the state covering the rent. Eligible participants, including ‘trapped buyers’, can later buy back their homes. This initiative is aimed at safeguarding primary residences for families in financial distress. Syprodat, the Cyprus Borrowers Association, has welcomed the scheme and encourages those who qualify to actively engage with this new opportunity.
What is the new mortgage-to-rent scheme in Cyprus?
The new mortgage-to-rent scheme in Cyprus allows vulnerable homeowners facing foreclosure to transfer home ownership to Kedipes and rent it for 14 years, with the state covering the rent. Eligible participants, including ‘trapped buyers’, can later buy back their homes. This initiative is aimed at safeguarding primary residences for families in financial distress.
A Warm Welcome from Syprodat
The Cyprus Borrowers Association, known locally as Syprodat, has recently heralded the inception of a ground-breaking mortgage-to-rent scheme. With immediate effect, this program is seen as a significant stride forward for eligible borrowers. Syprodat is advocating for those who qualify to actively engage with this new opportunity.
Safeguarding Homes for the Vulnerable
Central to this initiative is the protection of primary residences belonging to vulnerable households. The scheme facilitates the complete settlement of loans secured against these homes, providing a much-needed blanket of security for numerous families.
Who Can Benefit?
Key to this scheme are ‘trapped buyers,’ a term that refers to individuals who have lodged their sales contract with the Land Registry and obtained the so-called “distribution document.” These homeowners are now invited to participate and potentially find some relief from their financial burdens.
How the Program Works
Homeowners facing the possibility of foreclosure due to mortgage arrears can now breathe a little easier. By voluntarily transferring ownership of their homes back to the lender for a period of five years, they enter into a rental agreement with the state-owned asset management company, Kedipes. Kedipes, in turn, purchases the home, allowing former owners to remain as tenants.
This scheme includes a 14-year rental contract and provisions for the state to cover the rent during this period. Impressively, former homeowners—or a first-degree relative—retain the option to buy back their home within this timeframe.
Financial Thresholds and Criteria
Syprodat has outlined specific financial criteria for the scheme: unserviced loans that secure a primary residence up to €250,000, and beneficiaries of certain allowances. The scheme also accommodates individuals whose residences, valued at up to €350,000, were not viable for previous housing schemes.
Tenant Rights and Future Ownership
Participants over 65 years of age can rest assured they have a place to stay for 14 years or even until the end of their lifetime. After five years, the repurchase of the property is an option that considers various factors, such as changes in property value and accrued expenses.
In instances where the property is not repurchased, ownership will remain with Kedipes, ensuring long-term stability for the scheme and its beneficiaries.
Eligibility and Application
Eligible parties are encouraged to apply and take advantage of this opportunity. With the primary goal of providing a safety net for homeowners in distress, the mortgage-to-rent scheme is set to become a pivotal feature of Cyprus’s social support structure.
Quick Recap
- The new mortgage-to-rent scheme in Cyprus allows vulnerable homeowners facing foreclosure to transfer home ownership to Kedipes and rent it for 14 years, with the state covering the rent.
- Eligible participants, including ‘trapped buyers’, can later buy back their homes.
- This initiative is aimed at safeguarding primary residences for families in financial distress.
- Syprodat, the Cyprus Borrowers Association, has welcomed the scheme and encourages those who qualify to actively engage with this new opportunity.
- The scheme has specific financial thresholds and criteria, and participants over 65 years old have the option to stay in the rented property for 14 years or even until the end of their lifetime.
