The value of residential real estate financing has been raised to a maximum of 15% of the real estate finance companys net equity, according to Mohamed Omran, Chairperson of the Financial Regulatory Authority (FRA).

The value, which had previously been 10%, will be applied to the investor, their spouse and minor children.

The amendments also include increasing the maximum financing for non-residential real estate to 30% of the real estate finance companys net equity, instead of 20%. This is applicable for the investor, their spouse and minor children, or a single legal person and the parties associated with them.

The amendments came in response to a proposal by the Egyptian Union for Real Estate Finance to support the sector.

The proposal was put forward on the back of reports indicating that real estate units with an area greater than 86 sqm account for the highest percentage of financing. These units accounted for about 85.69% of real estate financing in the second quarter (Q2) of 2020.

Omran said that the FRA has sought to complete the financial solvency standards for mortgage finance companies. He added that companies will not be allowed to borrow more than ten-fold of their financial capabilities and that this percentage should not exceed 25-fold of their equity for mortgage refinancing companies.

The authority has expressed its initial approval for the introduction of a “real estate guarantee registry” as part of financial control measures.

Following its establishment, the registry will publicise real estate security rights and any amendments or write-offs that are made to them. It will also oblige the financing parties to record the financing agreement on the register.

2020 Daily News Egypt. Provided by SyndiGate Media Inc. (Syndigate.info).

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