Image caption Janos ran into debt after the financial crisis because of a foreign-currency mortgage

"The only luxury we allow ourselves," says Janos Ofella, 54, as he studies the special offers in the supermarket advertisement, "is coffee."

Not counting basics such as cooking oil, flour and sugar, his family of five spends 43 euros ($58; £36) a week on food.

That is rather typical in a country where 1.5 million people out of a population of 10 million could not afford to properly warm their homes last winter.

But what is unusual about Janos and his family is that they have a new home, paid for by the state, when their mortgage payments to the bank on their old home became unaffordable.

Already 43 families have already moved into this purpose-built village 30km (19 miles) south of Budapest.

Each family was selected by the Hungarian Maltese Charity Service, on the basis of criteria that included having children and being sufficiently ambitious to find work.

The village is a unique and controversial social experiment, but Janos, who is physically handicapped, has only praise for the initiative.

"My wife found work quickly, my children settled in to the school. There is already a good community here," he says.

He and his family ran heavily into debt in their old home in Tokod, in western Hungary - just one of more than a million households who fell foul of mortgages denominated in foreign currencies when the economic crisis struck in 2008.

Interest rates in Hungarian forints had been traditionally high, and in the first years of the new millennium as money flooded the world markets, parent banks abroad encouraged their subsidiaries in Hungary to make available cheap loans, denominated in Swiss francs in particular.

Of course we had fears before we came, but none of them have been realised Janos Ofella

Back in 2007 there were 150 forints to the Swiss franc, but today there are 250 to the Swiss franc, and more than one in five can no longer keep up with their monthly payments.

Hungarian households now owe about 10bn euros to the banks, with companies and local councils owing another 8bn euros.

Janos and his family pay about half the rent they would expect to for a house of this size. The Maltese charity also gives advice on finding work and retraining.

If a family can afford a car, Budapest is only half an hour away on the motorway. In the window of the charity office, there is even an advertisement for construction workers.

Nevertheless, the initiative has been savaged by opposition parties and all but the staunchly pro-government media, as a "debtors' ghetto".

Isolated estate

There is no shop, post office, creche or school, and gas was not provided following fears the families would not be able to pay their bills.

Apart from the school bus, few other buses connect the estate with the town of Ocsa, 6km away. Much criticism has also been directed at the social stigma those living in the estate might feel, lumped together in one place for all the world to see.

Image caption The Maltese charity runs an office in the village to help with finding work

Because of such negative media attention, few inhabitants are willing to be interviewed. Partly in consequence, there is little demand, for the time being, for the 37 homes that are still empty.

The government, though, is proud of its project, and defends it fiercely.

"You have to see the housing estate in the context of a wide raft of measures designed to help those in trouble with foreign currency mortgages," says Erika Asztalos, Deputy State Secretary at the Ministry for Human Resources.

"It was devised to keep families together who had either lost their homes, or were in danger of that happening."

Other measures already taken by the Fidesz government include a moratorium on evictions, and the artificial fixing of the exchange rates in 2011 to allow those who could pay off their debts with a single lump sum - usually borrowed from relatives - to do so.

Some 160,000 people took advantage of that scheme.

A state property-handling agency has also been established, to buy property from people who would otherwise have been evicted and their property auctioned by the banks.

The former owners are then allowed to continue living there, paying a low rent. The agency has already bought or is in the process of buying 11,400 homes.

'The banks have been slow'

Some debtors have also taken the banks to court for misleading them in the first place over foreign-currency loans, or for quietly changing the terms without consulting with the customers.

This week in the southern town of Pecs, Gyorgy Lehmann, a lawyer who is playing a prominent role in the "battle with the banks" won a landmark case.

The government has given the banks until the end of October to come up with a proposal to resolve the problem once and for all.

Image caption Many homeless Hungarians say the government is making their plight worse

"The banks have been very, very slow to come to terms with the problem, and the strong regulatory tradition established in the UK and the US after 2008 has not yet been established in Hungary,' says Peter Rona a member of the supervisory board of the Hungarian National Bank.

"What I think the banks are now fearful of is that you are starting to see a series of court decisions which will create a particular trend that is highly inimical to their interests.

"Their ability to foreclose real estate - on the property that was used as collateral - is also being increasingly constrained, in part by court decisions," he says.

As a result, believes Mr Rona, the banks are interested in reaching a deal with the government.

The dispute is over how the burden should be distributed between the debtors, the banks, and the state.

Back in his new home, Janos says he has no regrets.

"Of course, we had fears before we came, but none of them have been realised. The whole family are glad we came here, to start a new life."