Primary homes ‘safe’ from foreclosure up to € 250,000
The Council of Ministers has appointed the state-owned Cyprus Land Development Corporation (CLDC) to undertake the management of mortgages for low-income families with debts of up to 250,000 euros and small companies with turnover of the same amount and has declared that primary homes or primary assets are safe from foreclosure.
The CLDC will subsidise the interest on mortgages that have defaulted, in order to avoid foreclosure with a cap set at 4% and a two-year plan, renewable for another two years (2+2).
“We hope that after the lapse of this two-plus-two years, the economy will have recovered and the subsidy will no longer be necessary,” said Interior Minister Socratis Hasikos.
He added that the basic requirement for a person or an SME to qualify for this programme is a voluntary induction into the insolvency scheme and the conclusion of the restructuring of loans or repayment programme, as per the Central Bank of Cyprus directives for the management of delayed loan repayments, by resorting to a mediator of the Financial Ombudsman.
The primary home of a borrower or a company that has mortgaged the principal’s primary home is considered any property with at least six months residency per year. It must also have been mortgaged with a financial institution approved by the Central Bank, the minimum residence in the primary home must have been at least five years, the applicant must be a permanent resident of Cyprus and living here for the past ten years.
Finally, the mortgaged property must not exceed 250,000 euros, plus VAT and the total outstanding loan must not exceed 300,000 euros. In addition, the total value of all properties, excluding the primary home, must not exceed 100,000 euros. If the applicant has also resorted to the Welfare Office for the Guaranteed Minimum Income (EEE) and includes an amount to cover the interest on the defaulted mortgage, then the total amount of subsidy will be calculated so that the assistance does not exceed the maximum 4% interest on the loan.