SRC and REDF sign refinancing agreement worth SAR 10bln

The agreement aims to enhance the financial sustainability of REDF and increase home financing affordability for citizens


Riyadh:Saudi Real Estate Refinance Company (SRC), wholly owned by the Public Investment Fund (PIF), has announced the signing of a refinancing partnership agreement with the Real Estate Development Fund (REDF) to refinance a real estate portfolio worth SAR 10 billion.

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 program under Vision 2030 to raise homeownership rates by 70% by the year 2030. The agreement also supports REDF in enhancing its financial stability.

The agreement was signed in the presence of His Excellency Majed Al Hogail, Minister of Municipal and Rural Affairs and Housing and Chairman of the (REDF), and His Excellency Mohammed bin Mazyad Al-Tuwaijri, Deputy Chairman of the National Development Fund (NDF). The agreement was signed by Mansour bin Madi, CEO of REDF and Fabrice Susini, CEO of SRC.

Fabrice Susini, CEO of SRC, wholly owned by the Public Investment Fund (PIF), commented: “The agreement aims to increase the supply of home loans for affordable housing that aligns with our vision to develop a robust secondary home financing market for the benefit of the primary housing market in the Kingdom. Therefore, the agreement with REDF positions us as a catalyst in achieving the housing goals stipulated by Vision 2030. This is our largest agreement worth SAR 10 billion 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, CEO of REDF, stated: “The agreement aligns with our strategy to achieve the objectives of providing various financing and housing options to the citizens in the home financing market. The agreement also fulfils the needs and requirements of families benefiting from Saudi Arabia’s “Sakani” housing program under the Mado’om mortgage program to achieve the objectives of the housing program and raise the percentage of homeownership of families to 70% by 2030.

He added: “The financing partnership with SRC will enable us to achieve our objectives and enhance the sustainability of supporting Saudi families by designing new programs and initiatives that are consistent with the future phase of REDF after adopting its new system. 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 Q3 of 2021.”

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. SRCs’ expanding frequency of refinancing transactions are reflective of a paradigm shift in real estate financing from ‘originate to hold’ to ‘originate to sell’. This benefits all stakeholders in the housing ecosystem who stand to gain from additional liquidity, risk management, and lowered financing rates for Saudi families.

REDF offers a profit-packed loan of up to 100%, with a value of SAR 500,000, to meet the needs of Sakani beneficiaries. The subsidised home loan takes advantage of the self-construction option and allows citizens to opt for either ready-made or under-construction housing units, in partnership with more than 18 financing entities. REDF also provided more than SAR 31 billion in monthly support to more than 560,000 beneficiaries from June 2017 until Q3 of 2021.


About Saudi Real Estate Refinance Company (SRC):

Fully owned by the Public Investment fund (PIF), the Saudi Real Estate Refinance Company (SRC) was established in 2017, after obtaining a license to operate in the secondary real estate market by the Saudi Central Bank, with the goal of transforming the local housing market.

SRC enables individuals and entities interested in direct or indirect real estate financing to increase and diversify origination of long-term fixed-rate (LTFR) products.

As one of its primary roles, SRC provides banks and real estate finance companies with liquidity or capital relief, enabling growth in the home financing sector to increase home ownership rates among Saudi citizens. SRC will subsequently aggregate and packages home financing portfolios into mortgage-backed securities to be sold to domestic and international investors.

With a world class management team drawing from international best practice, SRC is uniquely positioned to become the partner of choice for banks and non-bank lenders in the Kingdom.

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About the Public Investment Fund (PIF):

The Public Investment Fund is one of the largest and most impactful sovereign wealth funds in the world, driving the economic transformation of Saudi Arabia for the benefit of its people while helping shape the future global economy. PIF is building a world-class portfolio through investments in attractive, long-term opportunities across diverse industries and asset classes internationally, while unlocking new sectors at home. PIF works alongside global strategic partners and renowned investment managers and acts as the Kingdom of Saudi Arabia’s primary investment arm aiming toward generating long-term value for the Kingdom of Saudi Arabia in line with Vision 2030.

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