State-owned asset management company, KEDIPES began sending the first approvals for eligible borrowers as part of the government-funded mortgage-to-rent scheme.

Speaking to CNA, Lambros Papadopoulos, President of KEDIPES said applications submitted by borrowers so far amount to 2,092 of which 1,448 have been deemed as eligible.

“This week we have the first letters of approvals,” he said, adding that approvals are expected to increase in the coming weeks.

Papadopoulos recalled that eligible households for the scheme were initially estimated around 3,000 whereas eligible borrowers applying so far were 1,448 amounting to 50% of the initial estimate.

The government-funded scheme aims to protect the homes of vulnerable households with a full settlement of their loans which is collateralised with their residences.

Under the scheme, approved by the European Commission’s DG Competition KEDIPES will acquire from banks and credit acquiring institutions that opt to participate in the scheme the primary residences worth up to €250,000 collateralising non-performing loans at 65% of the residence market value. The banks will write-off the remaining balance of the loan. Then KEDIPES will rent the house to the borrowers with the state covering the rent for a period of 14 years.

Eligible borrowers are those receiving public support allowances, as well as mortgage holders deemed not viable under the Estia and Oikia schemes with primary residences up to €350,000.

KEDIPES will rent the house to the borrowers with the state covering the rent for a period of 14 years after which a borrower has the option to buy back the house.