“Red” loans: who can receive a subsidy from 70 to 210 euros per month

The Greek Ministry of Finance will provide support to 21,000 vulnerable households until the Real Estate Leaseback Agency is put in place. The owners will be given from 70 to 210 euros per month to pay off the “red loans”.

The temporary support scheme provides a subsidy of 70 to 210 euros per month for 15 months to support vulnerable households in order to make payments on bank loans, the publication reports. dikaiologitika.gr.

The transition period to the permanent operation of the Real Estate Leaseback Agency* (Φορέας Επαναμίσθωσης Ακινήτων) has been agreed with the Commissioners as an interim solution exclusively for borrowers who fall under the provisions of the bankruptcy law or have low incomes. The temporary regime will remain in place until the necessary ministerial decisions are issued that will put the Real Estate Leaseback Agency into action so that it can acquire property and then rent it out to owners.

**Φορέας Επαναμίσθωσης Ακινήτων. Authority (Agency) for the acquisition and leaseback of real estate in accordance with Law 4738/2020 (art. 218).
The Real Estate Acquisition and Leasing Company is a private organization that will be selected by the state following an open international tender. This subject acquires the 1st place of residence of the debtor and is obliged to lease it to a citizen for 12 years. This avoids evictions that could occur if the property was purchased by a third party. During the 12-year lease term and until its expiration, the operator is obliged to resell the property to the citizen, provided that the citizen recovers financially and pays the rent punctually. The state (OPEKA) provides a citizen with a monthly rental allowance to help him live in it.

As expected, the agency will not be activated until February 2023, and its full operation is scheduled for the end of March next year.

Debtors who meet the following income and wealth criteria are eligible for temporary assistance:

the total income must not exceed EUR 7,000 for a one-person household, increased by EUR 3,500 for each member of the household, up to EUR 21,000 per year, regardless of the composition of the household. the total taxable value of the immovable property must not exceed the amount of 120,000 euros for one household, increased by 15,000 euros for each additional member, up to an amount of 180,000 euros.

In addition, the property limit applies to deposits, bonds, shares, etc. (securities that generate income).

The criteria are checked and rechecked when issuing the certificate of vulnerability, which is required for participation in the program and is issued by a special electronic platform of the Special Secretariat for Private Debt Management In this way, debtors avoid going to courts, as they did in the past, with subsequent long delays and a more permanent impact on the culture of payments.

The online platform will be user-friendly, eliminating the need to manually collect supporting documents when applying, and greatly reduce bureaucracy. In addition, the platform will implement automated checks and transitions to prevent and exclude strategic defaulters.

At the end of this program, vulnerable debtors who will not be able to service long-term and sustainable regulation must apply to an agency operating under law 4738/2020 (for the purpose of debt settlement and a second chance). This institution will purchase the first residence of specific vulnerable debtors and then lease it to them for 12 years.

The state will provide a monthly housing allowance to support their rent obligation. At the end of the 12-year period, debtors will have the exclusive privilege of being the first to buy the house if their financial situation has improved and stabilized.

The Hellenic Ministry of Finance is taking swift steps to set up a private Real Estate Purchase and Leaseback Agency and to this end will hold an open international competition to attract potential investors.

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