Cypriot authorities plan to submit an official request to the European Commission in June for the implementation of a mortgage-to-rent scheme, aiming to address nonperforming loans collateralized with primary residences and the premises of small and medium-sized enterprises with an estimated contractual value of 3 billion euros.
Consultations between Cyprus and the Commission’s Directorate-General for Competition (DG Comp) are well under way. The aim is to transform the state-owned Asset Management Company (KEDIPES) into a nationwide AMC which will in turn launch the mortgage-to-rent scheme.
The scheme will cover nonperforming loans collateralized with primary residences and mainly SME business premises valued at up to €350,000.
When the scheme is approved, KEDIPES will begin contacting banks and credit acquiring companies in order to implement the mortgage-to-rent scheme.
The consultations concern the change in KEDIPES’ mandate, which under the framework approved by DG Comp in 2018 is limited only to the management of nonperforming assets of the former Cyprus Cooperative Bank.