The meeting organized by the King Abdulaziz Center for National Dialogue last Tuesday, June 6, 2017, which hosted the leaders of the Real Estate Development Fund, revealed a number of technical and administrative aspects and obstacles to its progress. The meeting, which was characterized by transparency and clarity, explained that the Fund's financing capacity reaches 6 billion riyals annually and there are more than 12 thousand beneficiaries annually, and 411,811 eligible people are on waiting lists, while the records of the Ministry of Housing contain more than 800 thousand people waiting for support of various types.

The principle of transparency between the Fund and the media

The meeting, which was entitled, “The Future Role of the Real Estate Development Fund”, was attended by the General Supervisor of the Real Estate Development Fund, Mr. Ayham Al-Yousef, in addition to a number of economists, leaders and those interested in real estate, media professionals and writers concerned with real estate, in addition to a group of real estate developers, as part of the efforts of the Center to open channels of dialogue and communication between government and private institutions and various segments of society to establish bridges of communication and interaction between society and decision makers in those bodies.

The meeting, in which Amlak Real Estate Newspaper was represented by a delegation headed by Mr. Abdulaziz Al-Issa, Editor-in-Chief, aimed to remove the fog that surrounds many of the programs of the Real Estate Fund and its details are hidden from many citizens, media and real estate professionals, based on the principle of transparency between the Fund and the various media bodies.

Shedding light on subsidized financing programs

The meeting provided a full explanation of the subsidized financing program that targets the waiting lists of the Real Estate Fund, in partnership with banks and financial institutions, and the Fund pays the financing profits for the beneficiary in full or in part, and the meeting addressed the regulations that regulate subsidized financing according to the number of family members, income level and age, and support 100% for low and middle income according to the Fund's rules and regulations.

Subsidized financing achieves several advantages:

• Authorized by the Shari'ah Commission.
• Minimum subsidized financing: As per the Fund's policy.
• Maximum subsidized financing: SAR 500,000.
• Benefit from the soft mortgage product (reducing the down payment from 15% to 10%).
• That is, the beneficiary can obtain financing from a bank or finance company equivalent to a maximum of SAR 500,000 and the Fund will subsidize the costs of this financing for the beneficiary.

Highlighting the Fund's policies

During the meeting, the Fund presented its vision to media professionals, writers and public opinion leaders to benefit from their comments and opinions in order to achieve the public interest and contribute to clarifying the picture for all, and answered their questions and inquiries related to the Fund's programs and future plans.

The meeting dealt with a number of issues related to the Fund's policies. The meeting dealt with a number of fundamental points that affect the real estate affairs and shed light on the Fund's policies, explaining the reasons for the Fund's orientation towards the subsidized financing program, stopping lending in the previous way, how the partnership process is done with the financing entities, how the citizen benefits from the "subsidized financing“ program, and the most prominent current challenges facing the subsidized financing program.

The meeting dealt with a number of fundamental points that affect the real estate affairs and shed light on the Fund's policies.

Partnership with financing entities is a must

The opinions of the participants in the meeting addressed a number of topics about the Fund's shift towards partnership with financing entities, which came as an inevitable necessity for the Fund's continuation in its work, as the past years witnessed the failure of beneficiaries to pay installments, which affected the general budget of the Real Estate Development Fund, and its inability to lend to new beneficiaries, while some pointed out that if the Fund continues to lend in the old way, it will need at least 40 years to serve all beneficiaries on its lists.

Some pointed out that if the Fund continues to lend in the old way, it will need at least 40 years to serve all the beneficiaries on its lists.

Reduce the waiting period to five years

Some participants explained that the subsidized financing program came with the aim of serving all those registered on the waiting lists, reducing it from 10 years and more to a maximum of 5 years, and raising the home ownership rate in the Kingdom for citizens by about 52% by 2020.

Participants stressed that the subsidized financing program is designed to reduce the waiting period to five years. The fund officials stressed that the subsidized financing system follows the Sharia-compliant real estate financing system, which is what all Saudi banks and banks follow in their financing programs approved by their Sharia committees, as directed by the Saudi Arabian Monetary Agency (SAMA).

Subsidized Finance Beneficiary Positions

The meeting also touched on the importance of launching subsidized financing beneficiary centers in (Riyadh, Jeddah and Dammam), in accelerating the beneficiaries” access to their housing loan from the participating financing entities, answering their inquiries in an interactive manner and providing them with information in the fastest and easiest way. It is noteworthy that subsidized financing includes three types of financing: "self-building, buying a ready-made housing unit and buying a housing unit on the map".

The meeting also touched on the importance of launching subsidized financing beneficiary centers in Riyadh, Jeddah and Dammam.