تُولي المملكة العربية السعودية اهتمامًا خاصًا بقطاع الإسكان، الأمر الذي يساعد الكثير من رواد الأعمال على إطلاق مشروعاتهم الخاصة؛ لذا حرصنا

review the ways to obtain real estate financing in the Kingdom, based on announcements from Saudi banks.

We have previously published an article on the benefits of real estate leasing. However, it’s important to understand the risks before signing new real estate financing agreements. You should

Make sure you know the financing provider well, and only work with licensed companies that have a strong reputation.

Be wary of fake ads offering to repay loans or promising to pay off the entire loan or lower your monthly installments. These are scams.

This could result in losing your money or going bankrupt, and may also expose you to legal liability.

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Steps to Obtain Mortgage Financing

You can obtain mortgage financing through five different options, as follows:

1. Mortgage

A mortgage is a financing product that allows a borrower to obtain funds by pledging a property to the financing provider as collateral for a set period, until

the agreed installments have been paid in full.

If the borrower is unable to make payments, the financing provider is entitled to take the necessary steps to acquire the property. This makes it necessary to register the mortgage;

in accordance with the true nature of the contracts, and to halt procedures related to transferring ownership of the property.

The borrower may register the property in their own name while mortgaging it to a bank—if the financing is structured as a Murabaha—without disposing of the property unless the bank is consulted.

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2. Subsidized Mortgage Loan Program

The subsidized mortgage program is a Sharia-compliant home financing program that subsidizes financing costs for an amount of up to 500,000.

The Real Estate Development Fund runs this program in cooperation with participating banks and finance companies. It includes several products, such as the self-build product and the

under-construction housing units product and the ready-to-move-in housing units product.

Under this program, the Real Estate Development Fund covers all or part of the financing costs. The subsidy rate varies according to the beneficiary’s income and the number of

أفراد أسرته.

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3. Mortgage Financing

A mortgage financing of up to 90% of the property value can be obtained from commercial banks or financing companies licensed to offer mortgage financing products.

For its part, the Saudi Arabian Monetary Authority approved an increase in the maximum real estate financing granted by banks to citizens to own their first home from a rate of 70%.

of the property value previously.

Lease ending with ownership.

Down Payment Reduction Program

Related image.

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4. Rent-to-Own

In this type of financing, the finance provider purchases the property you want, then leases it to you in return for installment payments over a set period. Once that period has passed and all

installments have been paid, the lessor transfers ownership of the property to the lessee.

This type of financing is subject to a range of governing laws and regulations, as well as the agreed financing contract. If the lessee fails to make the required payments,

the lessor may terminate the contract and repossess the asset.

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5. Down Payment Reduction Program

The Down Payment Reduction Program aims to make it easier for citizens to obtain housing finance to purchase ready-built units by reducing the initial down payment.

The down payment is reduced from 10% to 5% for those approved by the Ministry of Housing, in exchange for a financial guarantee of up to SAR 40,000, provided by the Fund on behalf of

the beneficiary to the bank or finance company.