Nicosia’s ‘mortgage-to-rent’
The outgoing cabinet of Cyprus has approved the Finance Ministry’s proposal to establish a “rent versus installment” scheme known in English as a “mortgage-to-rent” scheme.
The proposal is the result of consultations with the relevant European authorities, according to a written statement issued by the Council of Ministers.
As stated in the written communication, the proposal has now been referred to the competent authority, which is the state aid watchdog, in accordance with the relevant procedures for obtaining final ratification by the competent European Union authorities.
It should be noted that in order to participate in the rent vs installment scheme, a borrower must meet three criteria: The candidate should have had a nonperforming loan until the end of 2021, the property that they received the loan for but are not servicing should not exceed 250,000 euros, and they should be receiving state aid.
The Cyprus Asset Management Company (KEDIPES) will play the most important role in this project. Therefore, its operations will be expanded so that it will buy properties from banks and then rent them to vulnerable borrowers.
