New state support program for the first home loans of vulnerable households

The Ministry of Finance announces the creation of a new program for the State support of the first home loans of vulnerable households.

Specifically, the program provides a state subsidy for the mortgage installment of vulnerable debtors in the amount of 70 to 210 euros per month, depending on the composition of the household. The duration of the program will be 15 months and will be submitted to Parliament for a vote in the near future. The main benefit for vulnerable debtors is the avoidance of creditors’ measures (eg foreclosures, auctions and evictions).

Eligible are debtors who meet the income, property and other criteria that were established and are valid in the welfare program “Housing Allowance” (JM 71670, Government Gazette 4500 / Β / 29-09-2021), according to which:

a) the total income should not exceed 7,000 euros for a single-person household, increased by 3,500 euros for each member of the household and up to the amount of 21,000 euros per year, regardless of the composition of the household.

b) the total taxable value of the real estate must not exceed the amount of 120,000 for a single person household, increased by 15,000 euros for each additional member and up to the amount of 180,000 euros.

In addition, the property limit applies to deposits, bonds, shares, etc. which applies to the “Housing Allowance”.

These criteria are checked and cross-checked when issuing a certificate of vulnerability, which is necessary for participation in the program and is issued by a special electronic platform of the Special Secretariat for Private Debt Management.

The program will be implemented through a special electronic platform, developed by the Special Secretariat for Private Debt Management. In this way, debtors’ recourse to the courts is avoided, as was the case in the past, with consequent long delays and more permanent effects on the payment culture.

The online platform will be user friendly, eliminating the need for manual collection of supporting documents when submitting the application and significantly reducing bureaucracy. In addition, the electronic platform will carry out automated checks and crossings, in order to prevent and exclude strategic defaulters.

At the end of this program, vulnerable debtors who will not be able to serve a long-term and sustainable regulation, should contact the special body of Law 4738/2020 for debt settlement and the provision of a second chance. This Institution will acquire the first residence of the specific vulnerable debtors and then will re-lease it to them for 12 years. The State will provide a monthly housing allowance, in order to support their obligation to pay rent. At the end of the 12-year period, the debtors will have the exclusive first privilege to repurchase the house, as long as they have recovered financially. The Ministry of Finance is taking rapid steps to create a private Agency for the Acquisition and Rental of Real Estate and for this purpose will hold a public international tender to attract potential investors.

By implementing targeted programs and actions, the Government is creating an integrated and multi-layered network of measures to support vulnerable households affected by the economic effects of both the multi-year economic crisis and the recent health crisis, in order to overcome the current financial difficulties. Also, the Ministry of Finance, with the legislative and digital tools it has introduced in recent years, addresses rationally and methodically the sensitive problem of over-indebtedness of households and businesses.