In the presence of His Excellency Majid bin Abdullah Al-Hogail, Minister of Municipal, Rural Affairs, and Housing and Chairman of the Board of Directors of the Real Estate Development Fund, the Real Estate Development Fund signed a financing partnership agreement—the first of its kind—with the Saudi Refinancing Company (SRC) to refinance a real estate portfolio owned by the Fund valued at 10 billion riyals.
Strengthening the Fund’s financial sustainability
The agreement was signed on behalf of the Real Estate Development Fund by its CEO, Mansour bin Madhi, and on behalf of the Saudi Real Estate Refinancing Company by its CEO, Fabrice Susini. The agreement aims to enhance the Fund’s financial sustainability, increase liquidity in the Kingdom’s residential real estate finance market, reduce financing costs for Saudi families, and raise the home ownership rate among Saudi families to 70% by 2030, in line with the objectives of the Housing Program (one of the programs under the Kingdom’s Vision 2030).
Providing diverse financing and housing options
On this occasion, Mansour bin Madi, CEO of the Real Estate Development Fund, explained that the agreement falls within the framework of the National Development Fund’s strategy supporting the future goals and plans “Real Estate Fund” to provide diverse financing and housing options in the residential mortgage market with the aim of meeting the needs and desires of “Sakani” beneficiaries under the subsidized mortgage program.
560,000 subsidized mortgage loans
He noted that the financing partnership with the Saudi Refinancing Company will enable the Fund to achieve its objectives and enhance the sustainability of support for Saudi families by designing new programs and initiatives aligned with the future phase of the Real Estate Fund following the adoption of its new system, and by continuing to provide monthly housing support to beneficiaries of the subsidized loan program to enable future generations to own homes. He highlighted that the Fund has provided more than 560,000 subsidized mortgage loans (from June 2017 to the third quarter of 2021) under the subsidized loan program.
Growth of the Real Estate Finance Market
In turn, Fabrice Susini, CEO of the Saudi Real Estate Refinancing Company, which is wholly owned by the Public Investment Fund, that the agreement aims to increase the supply of affordable housing mortgages as part of the company’s vision to develop a secondary mortgage market that supports the growth of the Kingdom’s housing sector, enabling Saudi families to obtain suitable housing in line with the objectives of Saudi Vision 2030, expressing his pride in signing the largest partnership agreement, valued at 10 billion riyals, to increase growth opportunities in the Kingdom’s mortgage market through the creation of limited-risk instruments in partnership with financial institutions.
It is worth noting that the Real Estate Development Fund offers a profit-sharing loan of up to 100% with a value of 500,000 riyals to meet the needs of “Sakani” beneficiaries, ranging from subsidized mortgage loans to take advantage of the self-build option to the purchase of ready-to-move-in or under-construction housing units, in partnership with more than 18 financing institutions. The Fund has also provided more than 31 billion riyals in monthly support to over 560,000 beneficiaries from June 2017 through the third quarter of 2021.
