The Cyprus Housing Finance Corporation (HFC) is preparing to sell €57 million worth of non-performing loans (NPLs) from its €270 million portfolio, as revealed during a House Finance Committee meeting on Monday.
Key Details of the Loan Sale
HFC Director General Christoforos Kaplanis announced that the loans included in the sale primarily involve:
- Primary residences valued over €250,000
- Other housing loans that do not qualify as primary residences, regardless of the outstanding balance
Although the loan sale was originally planned for 2025, it has been pushed to 2026 due to delays in implementing government schemes designed to assist borrowers.
Government Schemes Affecting the Loan Sale
Two major schemes influencing the timeline include:
- Oikia Scheme – Designed to manage loans granted under government housing initiatives
- Mortgage-to-Rent Scheme – Allows vulnerable homeowners facing foreclosure to transfer their property to state-owned asset management company Kedipes while paying rent, with an option to repurchase the property after five years
Kaplanis emphasized that without the full implementation of these programs, the final number of loans included in the sale remains uncertain.
Status of Loan Restructuring and Repayments
HFC has been actively working on loan restructurings and repayments, achieving significant progress:
- 1,334 loan cases settled in 18 months, including:
- 802 restructurings
- 531 full loan repayments
- NPL portfolio reduction:
- 2,100 loans in 2023 → 1,660 loans in 2024
Loan Approvals and Market Trends
Kaplanis also noted improvements in the loan approval process, reducing wait times:
- New loans are now processed within 3 to 4 months, compared to the previous 12-month timeline
Additionally, HFC has seen a decrease in new loan applications and loan transfer requests from other banks, following increases in deposit and lending interest rates.
Despite this, the organisation issued approximately €65 million in loans over the past year.
HFC had previously received a high number of loan transfer requests from other banks due to its lower interest rates, but it was unable to accommodate all applications due to capital reserve limitations.
Source: cyprus-mail.com