Government-Banking Meeting to Put the Final Touches on the Draft Real Estate Finance Law in Kuwait

Minister of State for Municipal Affairs and Minister of State for Housing Affairs Eng. Abdul Latif Al-Mishari met at the Credit Bank building with representatives of the Union of Kuwaiti Banks and Banks to present the draft real estate finance law for those eligible for housing care.

Minister of State for Housing Affairs Eng. Abdul Latif Al-Mishari

The meeting was held in the presence of representatives from the Public Institution for Housing Welfare, the Credit Bank, the Ministry of Finance and the Central Bank of Kuwait. The attendees praised the government's tireless efforts and its clear seriousness in moving forward with the real estate finance law in particular and developing the general system of housing care in general.

During the meeting, the draft law was discussed and the financing flexibility it provides for those eligible for housing care.

It is worth noting that the real estate finance law is part of an integrated vision to solve the housing problem in a sustainable manner. After the government spoke about the imminent approval of the public debt law, the draft real estate finance law for private housing is also close to being approved.

According to the draft project, it is proposed that the total "real estate financing" directed to private housing from banks reach 200 thousand dinars, distributed as follows: 70 thousand with a government guarantee, the cost of which is borne by the government, and 130 thousand that the banks lend to the beneficiary citizen in exchange for mortgaging the house.

The interest on bank loans is likely to be 2% above the discount rate, and there is also a proposal to extend the repayment period for housing financing from 15 years, as is currently applied, to 25 years, with the monthly installment raised to half the salary instead of 40 percent.

Regarding the expected interest rate, the discussion under government-banking consensus so far stipulates that the real estate loan from banks be at a reduced interest rate than the rates granted to individuals, indicating that the interest on bank loans is likely to be 2% above the discount rate of commercial financing interest, and that it be a flexible interest rate subject to review by the Central Bank every 5 years.