The Housing Finance Corporation is moving forward with plans to sell a portfolio of non-performing loans worth approximately €135 million, according to information presented during a discussion of the organisation’s 2026 budget at the House Finance Committee.
Speaking to journalists after the committee meeting, the corporation’s general manager Christoforos Kaplanis explained that last year’s budget had included a smaller portfolio of €57 million earmarked for sale.
Of that amount, about €52 million concerned loans linked to properties valued above €250,000, while roughly €5 million involved cases that no longer qualify as primary residences.
For the current year, the organisation plans to include a portfolio worth €135 million for sale. Around €50 million relates to properties valued above €250,000, while €85 million involves loans that have been in arrears for more than eight years.
Kaplanis clarified that these are problematic loans, noting that a delay of eight years corresponds to 96 unpaid instalments.
Tender process expected in 2026
Regarding the procedure, Kaplanis said that once the budget is formally announced a tender will be launched through the public procurement process.
The call for bids is expected to be issued in April or May, while the process itself could be completed within 2026 or early 2027.
The final sale, however, is likely to take place towards the end of 2027 or early 2028, as roughly one year is required for due diligence.
Reduction in non-performing loans
Presenting the budget to the Finance Committee, Kaplanis said the organisation is now in a significantly improved position compared with previous years.
Until recently, non-performing loans stood consistently at around €270 million annually. By February this figure had fallen to €254 million, or roughly €230 million when loans still classified as restructurings are excluded.
He added that government support schemes had contributed to this reduction, including the “Estia” housing support scheme and the “Rent-in-place-of-instalment” programme.
Over the past 26 months, the organisation has implemented 486 solutions for problematic loans with a total value of about €50 million, a figure Kaplanis said is double or even more than double the levels recorded in previous years.
In total, including loans managed by the organisation with government or state-entity funding, 1,557 cases worth €85.5 million have been processed.
Technological upgrade underway
Kaplanis also said the organisation is moving forward with a technological upgrade and the gradual separation of its systems from KEDIPES.
The first phase of the project has reached 43 percent completion and is expected to finish by mid-2026.
The corporation is also planning to develop electronic banking services, as well as introduce customer services such as payment cards and ATMs.
Responding to reports of delays in processing loan applications, Kaplanis said the issue has been resolved.
“When a complete application is submitted with all the required documents, the approval and implementation of a loan can now be completed within one to two months,” he said.
He added that the organisation offers housing loans with an interest rate of 3.25 percent, which he described as among the lowest on the market. Unlike commercial banks, the corporation applies annual compounding and a single announced rate.
Parliamentary reactions
During the committee session, Christiana Erotokritou said the Democratic Party (DIKO) is particularly interested in expanding the organisation’s activities to strengthen its role in meeting society’s financing needs. She said the corporation’s progress in recent years has been positive and that public confidence should grow in the idea that state organisations can remain financially sound while operating for the benefit of citizens.
Savvia Orfanidou of the Democratic Rally (DISY) congratulated the management and staff for their efforts to assist citizens who struggle to secure financing from other sources. Meanwhile, Andreas Kafkalias of AKEL argued that the data presented confirm the absence of a comprehensive strategic plan to address the housing crisis. He said that during a prolonged period in which “the right to housing is turning into a privilege and a luxury for a few”, stronger political intervention is required.
Kafkalias added that the Housing Finance Corporation no longer fully serves the purpose for which it was established, namely the prioritised provision of affordable housing loans. At the same time, he argued that the organisation no longer functions as a pillar of support for low- and middle-income households, claiming that decisions taken in recent years have effectively turned it into another bank.
For his part, Alekos Tryfonidis of Democratic Alignment (DIPA) said the organisation’s role remains particularly important, especially at a time when housing costs represent one of the most serious problems facing Cypriot society. He stressed the need for continued support for the organisation so that it can maintain its social role by providing loans to low- and middle-income households. Tryfonidis also noted that the organisation’s overall position appears improved compared with last year, with progress in staffing, management of problematic loans and technological upgrades.
Source: CNA