The cabinet approved a €165 million scheme on Thursday aimed at helping vulnerable people who took out housing loans under various state plans and were having difficulty repaying them.
Dubbed, Ikia (home), the scheme is part of government efforts to protect primary residences and is almost entirely addressed to vulnerable households either with very low income or without any immovable property.
Based on preliminary estimates, the number of eligible loans is around 1,850 with a value of €165 million.
Ikea only concerns loans to individuals and not companies.
According to a cabinet announcement, it aims to help people who borrowed government money to acquire homes and whose loans were considered non-performing at the end of December 2019.
The scheme affords borrowers to settle the balances of their loans through two ways: either through restructuring the remaining principal and agree to instalments or fully repay the remaining principal immediately and have the interest rate and other charges written off. Life and fire insurance premiums are exempted.
The scheme includes a number of terms and conditions, including income criteria.
To be eligible, a loan must be linked to a house whose market value does not exceed €350,000.
Also, gross annual family income for 2019-2020 must not exceed €50,000 for a couple with at least one child, €35,000 for a couple without children, and €20,000 for single-person households.
The remaining net assets of a household, except the main residence and other credit facilities, not including the mortgage, do not exceed €250,000.
Approved borrowers will have 60 days from the application date to choose an option and 120 days to review and implement the solutions.
The scheme is subject to the approval of the European Commission.
Source: Cyprus Mail