“Instalment subsidy due to interest rate increase” Programme – Gefyra 3
The platform for managing applications for inclusion in the “Instalment subsidy due to interest rate increase” Programme – Gefyra 3 opened on Thursday 9 March 2023.
This programme is exclusively addressed to vulnerable debtors. A vulnerable borrower certificate must be issued before filing a relevant application. This can be issued through the platform developed by the General Secretariat of Information Systems for Public Administration, in partnership with the Special Secretariat for Private Debt Management, and is available through the Public Administration Single Digital Portal (gov.gr).
1. What is the instalment subsidy programme for mortgage or small business loans?
The instalment subsidy programme for performing mortgage or small business loans taken out by vulnerable borrowers, with the first home used as collateral, is offered by credit and financial institutions. The Special Secretariat for Private Debt Management assists in implementing the programme, as to the first step, which is issuing a relevant vulnerable borrower certificate.
2. What is subsidised as part of the programme?
The programme is addressed to vulnerable borrowers who took out mortgage or small business loans, with their first home used as collateral, up until 30.06.2022. As part of the programme, 50% of the interest rate increase (with the reference date for calculating the increase being 30.06.2022) is subsidised for 12 months.
3. What is the subsidy amount?
The subsidy equals to 50% of the difference between the reference instalment in July 2022 and each loan instalment thereafter that is sent to the platform, due to the corresponding interest rate increase. The maximum subsidy amount is €150 per instalment, while it shall not exceed 15% of the subsidised instalment.
4. How do I apply for the programme?
The first step for applying for the programme is to have a vulnerable borrower certificate issued. The certificate is issued by filing an application at https://www.gov.gr/ipiresies/periousia-kai- phorologia/diakheirise-opheilon/bebaiose-eualotou-opheilete. Note that when filing this application, the applicant must choose “consent to forwarding data to institutional creditors”, so the vulnerable borrower certificate may be forwarded online to their creditor and the subsidy programme procedure may go ahead through the systemic bank platform. In the next step, they will be notified online by the bank that will process their application, so the procedure may be concluded and the subsidy may commence.
5. What are the conditions for a borrower to be entitled to the subsidy?
The conditions for inclusion of a borrower in the scope of the programme include:
a) They must meet the conditions for classifying as vulnerable in accordance with Article 3 of Law 4472/2017 and Article 217 of Law 4738/2020.
b) Their income must be between €9,100 and €27,300.
c) Their first home must be used as collateral for the mortgage or small business loan (irrespective of currency, e.g. EUR, CHF, USD).
d) Their loan must be a floating-rate loan with fixed maturity (amortised/amortising) at the time the application is filed.
e) The loan must be a performing loan at the time the application is filed, i.e. less than 30 days overdue.
6. What part of the loan repayment period will the subsidy cover?
The subsidy covers loan repayments for 1 year from the time the application is filed.
7. Can the applications be filed during a specific period or throughout the duration of the programme?
The applications for inclusion in the subsidy may be filed within 3 months from the day the platform is up and running, i.e. 08.03.2023 (final submission date: 31.07.2023).
8. How can it be documented that the criteria are met and the certificate can be issued?
When applying through the Special Secretariat for Private Debt Management, the vulnerable borrower provides their consent for the processing of their data, and the lifting of the bank and tax confidentiality, so data may be collected from available sources documenting that the criteria for the vulnerable borrower are met. Once it has been established that these criteria are indeed met, the certificate is issued.
9. Does the approval apply throughout the programme?
Will it be possible to determine the total amount the client may potentially be entitled to for the entire subsidy period? The initial approval applies throughout the programme, given that the client is not deemed non-performing. For the month(s) that the client is deemed non-performing, they will not be entitled to the subsidy. Provided they are deemed performing again, then the loan is automatically included in the subsidised loans for the following month. A client is deemed non-performing if they owe an amount equal to at least 1 instalment plus a 10% increment (with a minimum increment of €10). The amount the client may potentially be entitled to cannot be calculated at the time the loan is included in the programme.
10. Clients excluded
Clients with the following features are excluded from the instalment difference financing programme:
- Be guarantors in loans to be included.
- Have a fixed-rate loan at the time they apply.
- Took out the loan after July 2022 (for new loans).
- Loans that are being settled during the subsidy (will be excluded henceforth), except from low-start and self- settlement.
- Have debts not included in the subsidy, such as:
- Revolving loans
- Credit cards
- Letters of credit
- Letters of guarantee
11. Conditions for inclusion for overdue loans and settlements
If a loan is more than 29 days overdue at the time of the application, the platform classifies it as non-eligible. It is not possible to capitalise any amounts to include them in the loan.
12. How will the subsidy amounts be paid to the client?
The subsidy amounts will be credited into the eligible loan debt accounts, through the Hellenic Bank Association.
13. Which is the reference date for comparison of instalment deviations in order to grant the subsidy?
The reference instalment for comparison with the current instalment is the nominal instalment as at July 2022.
14. Is there a maximum subsidy amount?
Based on the programme specifications, the maximum subsidy amount is €150 per debt, which also cannot be greater than 15% of the eligible loan monthly instalment.
15. Are there any subsidy discontinuation criteria?
Yes, when the applicant is deemed non-performing for a specific period, in which case the subsidy will not be granted. If they revert to performing during the 12-month period, the subsidy will be granted, minus the months when they were deemed non-performing.
16. If I participated in the Gefyra I and II subsidy programmes, will I receive a subsidy under this programme?
You can participate as per normal, provided you are not under supervision or following a period of supervision. Loans receiving subsidy through Gefyra I and II will not be assessed as eligible.
