(1) The Scheme
The Central Agency subsidises by a maximum of 3.5 percent, the interest rate of housing and business loans, at any financial institution, provided that the applicants will bear the burden of a 2% minimum interest rate, they have submitted an application and have been assessed as entitled persons, in accordance with the provisions of the regulations of the Central Agency for Equal Distribution of Burdens (Draft Rehabilitation pre-war Solvency) and based on the general criteria approved by the Cabinet.
(2) Purposes of the Scheme
The purpose of the Scheme is to subsidise by a maximum of 3.5 percent the interest rate of housing and business loans of entitled persons, provided that the applicants will bear the burden of a 2% minimum interest rate, for the following purposes:·
(a) Acquisition in Cyprus of an appropriate privately-owned residential unit for owner occupancy and permanent residence or for necessary/substantial improvements or additions to an existing residential unit in Cyprus to make it suitable for permanent residence.
(b) Acquisition and/or expansion and/or renovation of privately-owned business premises or renovation of rental business premises in Cyprus or/and purchase of office equipment and/or machinery and/or share capital in a limited liability company.
(3) Entitled Persons
Entitled Persons are:
(a) Applicants who no later than six months before the submission of an application to the Central Agency, have secured a housing loan from any financial institution or intend to secure such a loan once their application is approved, with personal guarantees or mortgage on property in the nonoccupied areas of the Republic.
(b) Applicants who after the submission of an application to the Central Agency and before its approval, have secured a business loan from any financial institution or intend to secure such a loan once their application is approved, with personal guarantees or mortgage on property in the non-occupied areas of the Republic.
(4) Criteria for the implementation of the Scheme
In addition to the existing general criteria and the criteria for granting housing loans guaranteed by the Central Agency, which will apply mutatis mutandis to the implementation of the Scheme, the following criteria also apply.
(a) The Central Agency will subsidise by a maximum of 3.5 percent only the interest rate of the loan of the entitled applicants, provided that they are in line with the established criteria but will always bear a 2% minimum interest rate. However, if the total interest rate is less than 2 percent the Central Agency will not subsidise the loan.
Each year, the applicants must present to the Central Agency a bank statement regarding the interest rate charged on their loan in order to enable the calculation of the interest rate percentage to be subsidised. ·
(b) The amount of the subsidised rate will be deposited to the financial institution annually, at the beginning of each year, by the Central Agency in equal installments according to the repayment period of the loan approved by the Central Agency and not in accordance with the repayment period of the loan approved by the financial institution.
(c) The amount of the subsidised interest rate will be calculated on the current outstanding balance of the loan, at the time the application is evaluated, subject to consistent repayment.
(d) In cases where legal action is taken against the applicant, by the financial institution, for late payment of installments of a housing loan, the payment of the subsidy will be suspended. Whereas in the case of business loans the subsidy will be terminated.
(e) Where repayment of the loan has commenced before the approval of the application, the Central Agency shall subsidise the interest rate of the current outstanding balance of the loan at the time of approval and not on the initial amount of the loan.
(f) The Central Agency will not guarantee in any way the repayment of the loan of the applicant.
(g) The applicant is not required to mortgage the occupied or inaccessible property in favour of the Central Agency.
(i) In order to achieve the objectives and purposes of the scheme, the inclusion of all applicants who have secured a housing loan by the time their application is evaluated or intend to do so after being approved is mandatory.
9. Resources available for the Scheme
The provision of loans, loan guarantees and subsidised interest loans through the Scheme will always depend on the available resources of the Central Agency for the Scheme.
10. Revisionary Authority of the Central Agency
Applicants who disagree with the decision of the Board of Management regarding their application, may file an appeal to the Revisionary Authority against the Board’s decision. The appeal must be made within the period of 30 days from the date of notification of the decision of the Board to the applicant. The appeal must be in writing and be addressed to the President of the Revisionary Authority and set out the reasons for the appeal.
The Revisionary Authority examines the appeal and, having heard the views of the interested parties, decides on the appeal.
11. Further information
Telephone number: 22468360, 2246835