The Cyprus government has officially approved the Rental in Exchange for Instalments Plan, an initiative aimed at providing housing support to eligible individuals. KEDIPES, an asset management company, has been tasked with overseeing the implementation of the plan.

Starting in October, eligible individuals can submit their applications to KEDIPES as the Rental in Exchange for Instalments Plan launches. Recent estimates suggest that around 800 borrowers will benefit from the program, settling loans totaling approximately €180 million.

The Rental in Exchange for Installments Plan addresses Cyprus's housing challenges, particularly regarding affordability for citizens.

Under the plan, the government will cover rental payments for 14 years or the lifetime of individuals aged 65 and above, provided they meet specific eligibility criteria. The government plans to allocate approximately €5.2 million per month for rent payments to KEDIPES.

A significant feature of the plan allows borrowers to repurchase their properties after a five-year period, but before the 14-year term ends, at a price exceeding 65% of the original purchase price. This provision aims to encourage long-term occupancy and financial responsibility while enabling borrowers to eventually own their homes.

The plan follows a structured process. Around 800 borrowers are expected to be approved, with 400 from banks and credit acquisition companies (EEPs) and another 400 from KEDIPES's existing portfolio.

Properties transferred from banks to KEDIPES have an estimated collective value of €90 million, adding to the company's existing portfolio worth another €90 million. KEDIPES will acquire these properties at 65% of their appraised value, amounting to €58.5 million. 

Properties already under KEDIPES's management and included in the plan will undergo repairs totaling approximately €13.5 million, with an additional €9 million allocated to settle any outstanding charges. These expenses will be factored into the final repurchase price at the plan's conclusion.

Approximately €5.2 million per month in rental payments will be disbursed to KEDIPES for the approved 800 borrowers. This amount includes €2.6 million for properties acquired from banks and EEPs, as well as an equal amount for properties already under KEDIPES's management.

The Rental in Exchange for Installments Plan stipulates that the government will subsidize 65% of the rent paid to KEDIPES for the entire 14-year period. Rental rates will be based on prevailing market rates, ensuring fairness and transparency.

Borrowers have the option to repurchase their occupied properties after a five-year period but before the 14-year term ends. The repurchase price will exceed 65% of the initial purchase price, providing borrowers with an opportunity to regain ownership of their homes.

The beneficiaries of the Rental in Exchange for Instalments Plan fall into two categories: recipients of EEPs, single parents, large families, low-income retirees, recipients of disability pensions, and individuals with disabilities. The second category includes applicants who were part of previous housing plans but were assessed as non-viable or withdrew from the programs due to financial constraints.

To be eligible for the first category, the value of the property must not exceed €250,000. For the second category, the property value cannot exceed €350,000.

The Rental in Exchange for Instalments Plan, overseen by KEDIPES, represents a significant step in Cyprus's efforts to address housing issues and enhance citizens' lives. By providing rental support and a pathway to homeownership, the program aims to alleviate financial burdens and foster a stable and sustainable housing market. 

With applications opening in October, this initiative is expected to have a meaningful impact on real estate accessibility and affordability for individuals and families across Cyprus.