The loan funds are paid directly to the developer, which eliminates the risk of the buyer using them for a different purpose. At the same time, a condition for disbursing the CashFree Housing loan is the payment of a reservation fee of 5,000 EUR.
Borrowers have the option to insure their ability to repay the loan. If an insured event occurs that prevents repayment, the insurance company takes over repayment according to the insurance contract.
Under the future purchase agreement, the developer will not transfer ownership of the apartment or parking place / storage unit to the buyer until all obligations toward Yellow Melon and the investors are settled.
If the buyer stops paying the agreed loan installments, or fails to repay the loan at maturity, then at loan acceleration their future purchase agreement for the apartment / parking place / storage unit with the developer will also be terminated, and they will lose the paid deposit.
The entire principal of the financed loans is guaranteed directly by the project developer. If the borrower does not repay their loan, the extra guarantee mechanism is applied, ensuring that the investor does not lose their money.
What is included in the Developer’s Extra Guarantee?
The developer guarantees to repay the full principal amount of the loan to the investors at the moment the apartment financed by the loan is resold to a new buyer. The new sale price of the apartment has no impact on the obligation to repay the full principal.
From the termination of the future purchase agreement, the developer has a 3-month exclusivity period to resell the apartment. After these three months, any investor who financed the loan may purchase the apartment under the same conditions as the original buyer. This prevents suspicion of intentionally delaying the sale to postpone repayment of the secured funds.
If the apartment is not sold within 12 months from the termination of the agreement with the original buyer, the developer is obliged to repay the full loan principal to the investors, regardless of whether the apartment has actually been resold.
In the case of a CashFree Parking loan, the developer guarantees to repay all funds provided by the investors. This means that if the buyer fails to repay their obligation, the loan will be accelerated and the developer’s guarantee will immediately be activated, covering the full investor principal and, in standard cases, any unpaid interest and penalties for improper repayment.
Any unpaid interest and penalties for breaching the loan agreement will be legally enforced by Yellow Melon directly against the borrower, potentially leading to enforcement proceedings. The outstanding claim plus accessories will continue to accrue statutory penalty interest until fully repaid. Yellow Melon will ensure the entire recovery process and cover the related enforcement costs on behalf of the investors.