The application period for the ESTIA Scheme (the “Scheme”) has commenced on the 2nd September 2019 and will remain open until the 15th November 2019. The Scheme has been developed by the Ministry of Finance and it is under the operational control of the Ministry of Labour, Welfare and Social Insurance.
ESTIA is a special one-off government scheme which is expected to benefit more than 10,000 borrowers. The primary aims of the Scheme are:
- To provide fiscal assistance to borrowers with non-performing loans secured by an eligible primary residence;
- To protect the primary residence of eligible applicants; and
- To mitigate the burden of non-performing loans on the Cypriot banking system.
The Scheme will provide a plethora of advantages to thousands of vulnerable borrowers including a reduction in their debt obligations, a longer and more affordable repayment plan and protection to their primary residence. The Scheme aims to put an end to the uncertainty that has plagued borrowers and their families for years and provide them with a unique opportunity to settle their financial obligations.
Applicants will need to satisfy a number of wealth and income-related requirements. Some of the main criteria include that:
- On 30 September 2017, at least 20% of all obligations of the borrower exhibited arrears for at least the ninety (90) days immediately preceding 30 September 2017; and
- Loans are secured by a primary residence with open market value of less than €350,000.
The non-performing borrowers who apply and meet the relevant eligibility criteria will be offered a restructured payment plan by their bank and the Cypriot state will subsidize the 1/3 of their restructured loan installments.
Completed applications must be submitted within the stated timeframe to the relevant participating Banks or Credit Acquiring Companies for evaluation. The participating institutions are:
- Bank of Cyprus
- Hellenic Bank
- Cypriot Asset Management Company (KEDIPES)
- Alpha Bank
- Astrobank
- Eurobank
- National Bank of Greece
- Housing Finance Corporation
- Gordian Holdings
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