Housing Finance Corporation plans sale of €57m in non-performing loans

The Cyprus Housing Finance Corporation (HFC) plans to sell €57 million worth of non-performing loans (NPLs) from its €270 million total loan portfolio. These loans mainly involve primary residences worth over €250,000 and other housing loans not considered primary residences.

This sale was originally set for 2025 but has been delayed to 2026 due to hold-ups in government housing schemes like the Oikia and mortgage-to-rent schemes. The Oikia scheme helps manage government housing loans, and the mortgage-to-rent scheme allows vulnerable homeowners to transfer properties to a state company, paying rent with an option to repurchase later.

HFC's director, Christoforos Kaplanis, stated that the final number of loans to be sold depends on how successful these schemes are. The mortgage-to-rent scheme has seen a 72% success rate, and higher success would improve NPL management.

Kaplanis also highlighted that HFC has been focused on loan restructurings and repayments, with over 1,300 cases settled in the last 18 months. The number of non-performing loans dropped from 2,100 in 2023 to 1,660 in 2024. New loan approvals now take 3-4 months, much quicker than the previous year-long process.

Lastly, Kaplanis noted that HFC issued about €65 million in loans last year, but new loan applications have decreased due to rising interest rates.