Engineer Youssef Al-Zaghibi, Director General of the Real Estate Development Fund, revealed the key features of the accelerated loan. Al-Zaghibi noted that the committee formed by representatives of the Fund and banks operating in the local market completed its review of the mechanism for providing the accelerated loan last week.
Al-Zaghibi added that three banks will submit competitive bids for the accelerated loan—including interest rates—to the committee after the holiday, noting that this does not prevent all banks from participating in the accelerated loan program.
”Amlak” newspaper outlines the key features of the accelerated loan, which are as follows:
1- The accelerated loan is a Sharia-compliant loan with a maximum amount of 500,000 riyals, financed by a commercial bank or a real estate finance company for citizens who are on the Fund’s loan waiting list and wish to expedite obtaining a loan to build or purchase a residential unit.
2- The Fund pays the loan profits to the bank or company on behalf of the borrower.
3- The borrower repays the principal of the loan first to the bank according to the term they choose, provided it does not exceed 15 years.
4- After the principal is paid off, the borrower repays the loan interest to the Fund in monthly installments over a period of 5 years.
5- During the repayment period to the bank, the property will be registered in the bank’s name; after the bank loan is fully repaid, the property will be transferred to the borrower’s name and mortgaged to the Fund if the loan is under the lease system.
6- If the loan is under the Murabaha system, the property will be registered in the borrower’s name and mortgaged to both the bank and the Fund, each according to its share.
It should be noted that the Board of Directors of the Real Estate Development Fund has approved the launch of the accelerated loan program, and the Fund held a meeting with bank executives. A working group was formed, bringing together the Fund’s management and representatives from several banks, to develop the appropriate mechanisms for implementing this initiative in accordance with the Fund’s regulations, as well as the banks’ regulations and policies regarding real estate financing.
