Pri­mary homes ‘safe’ from fore­clo­sure up to € 250,000

Financial Mirror (Cyprus) - - FRONT PAGE -

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.

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