In total, credit institutions are expected to contribute €100 million to the entity.

Greek banks are set to play a central role in creating the new entity, which is designed to manage repossessed homes while preventing evictions. This marks a significant shift in Greece’s housing policy landscape. According to recent disclosures in Parliament by the Deputy Finance Minister, the banks will participate in the scheme through either equity contributions or loans.

In total, credit institutions are expected to contribute 100 million euros to the entity. This funding will come either as direct investment, making the banks shareholders with profit expectations, or as loans, depending on negotiations with the entity. Essentially, the banks will gain a stake in properties that were once mortgage collateral, but this time they will not bear any credit risk.

How the 100 million euros is structured — whether in equity, loans, or a mix — will depend on the investment’s internal rate of return (IRR). If no third-party investors join, officials say that the banks’ funding alone could cover the purchase of up to 2,000 homes.

Not Just an Investment Scheme — A New Housing Model

This structure is more than just a financial instrument — it could represent a new model for housing policy in Greece. In this model, a homeowner at risk of foreclosure loses their home to the bank. The property is then sold to a new entity, in which the bank may be a shareholder, or the sole shareholder if no outside investors come forward. The former homeowner remains in the property, but now as a tenant, paying indirect rent back to their original lender through the new intermediary entity.

How the Leaseback Scheme Works

The Property Acquisition and Leaseback Entity, which was selected through an international tender process, will purchase homes from owners who are in significant debt and lease them back to them for 12 years in order to prevent evictions. If they recover financially, tenants can repurchase their homes, while the state will support them with monthly rent subsidies through the social welfare agency OPEKA.

Original Story: Tovima | Author: Newsroom
Edition and translation: Prime Yield