The Ministry of Housing plans to launch a mortgage guarantee initiative this year to accommodate low-income groups who have been excluded from the market.

This was explained by the General Supervisor of Mortgage Financing Programs at the Ministry of Housing, Engineer Abdulrahman Al-Dhakir. Al-Dhakir said that the initiative will cover certain cities and villages that mortgage lenders tend to avoid, in addition to covering financing risks.

He noted that work is currently underway to readjust the terms of the subsidized mortgage following the Saudi Arabian Monetary Authority’s decision to reduce the down payment for housing to 15%.

Al-Dhakir explained that the financing profits earned by real estate lenders vary from one lender to another, as they are periodically updated by lenders based on fluctuations in SAIBOR rates, noting that the loan collateral is the residential unit itself, not the borrower’s salary.