Saudi Real Estate Refinance Company (SRC), wholly owned by the Public Investment Fund (PIF), announced on Monday that it has signed a refinancing partnership agreement with the Real Estate Development Fund (REDF) to refinance a real estate portfolio worth 10 billion Saudi riyals ($2.7 billion).
SRC said in a statement that the agreement aims to increase the liquidity in the home financing market in the Kingdom, reduce the cost of home financing for Saudi families and support the objectives of the housing programme under Vision 2030 to raise homeownership rates by 70 percent by the year 2030. The agreement also supports REDF in enhancing its financial stability.
The agreement was signed by Mansour bin Madi, CEO of REDF and Fabrice Susini, CEO of SRC.
Susini said the agreement aims to increase the supply of home loans for affordable housing and develop a robust secondary home financing market for the benefit of the primary housing market.
“This is our largest agreement ...with a home financing originator and with this, we are unlocking opportunities for the growth of home financing market in the Kingdom by creating low-risk tools in partnership with financial institutions.”
Mansour bin Madi said the agreement also fulfils the needs and requirements of families benefiting from Saudi Arabia’s ‘Sakani’ housing programme under the Mado’om mortgage programme to achieve the objectives of the housing programme.
“Furthermore, the agreement guarantees the continuation of providing monthly home financing to the beneficiaries of the Mado’om program to enable future generations to live. Through the Mado’om program, we succeeded in providing more than 560,000 home loans from June 2017 until the third quarter of 2021,” he said.
According to the press statement, SRC, formed in 2017 by PIF to facilitate Vision 2030 homeownership goals, provides liquidity to originators by buying home financing portfolios from local banks and real estate financing companies, as well as aggregating and packaging the portfolios into Shariah compliant mortgage-backed securities for sale to domestic and international investors.
REDF’s subsidised home loans, the statement noted, allows Saudi citizens to opt for either ready-made or under-construction housing units, in partnership with more than 18 financing entities. REDF provided more than 31 billion riyals ($8.3 billion) in monthly support to more than 560,000 beneficiaries from June 2017 until the third quarter of 2021.
(Reporting by SA Kader; Editing by Anoop Menon)
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