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RIYADH – Saudi Real Estate Refinance Company (SRC), a subsidiary of the Saudi Public Investment Fund (PIF) and Deutsche Gulf Finance (DGF), has signed a partnership agreement under which the CBC regularly acquires the mortgage portfolio issued by DGF, through a portfolio purchase program as well as a short-term Murabaha financing facility that allows storing loans. The program will be rolled out over the next 12 months.
The strategic agreement was signed by SRC CEOs Fabrice Susini and Mohammad Al Dowesh, acting CEO of DGF, at a press conference in Riyadh.
As part of this agreement, DGF will increase its long-term and fixed-rate mortgage (LTFR) offer for less than 25 years, providing citizens with stability and security throughout the loan agreement.
The partnership agreement demonstrates the CBC's commitment to inject more liquidity into the Saudi real estate market and to ensure the stability and growth of the Kingdom's secondary mortgage market.
Commenting on the signing, Fabrice Susini said: "This agreement embodies the strong and active partnership established with DGF. It is also a clear demonstration of our goal, as well as our commitment to increasing home ownership among the Saudis. As the housing market in the Kingdom is booming, we need to ensure that more Saudi citizens can afford housing. With improved financing and liquidity conditions, we have begun to reshape the market and create the conditions for an efficient secondary mortgage market in the Kingdom, thus helping to make real estate financing more accessible to investors. future Saudi owners.
The partnership agreement follows SRC's recent announcement of a 40-basis-point rate reduction on its fixed-rate long-term mortgage (LTFR) and an extension of its offer to maturity. 39 to 25 years old. This is the second rate cut in less than three months, the previous one reaching about 100 basis points.
Mohammad Al Dowesh, interim CEO of DGF, said: "This agreement reflects the ongoing cooperation between the two companies to achieve the objectives of the Kingdom's Vision 2030 to increase the percentage of suitable homeowners among citizens. Today, we are signing this partnership agreement as a continuation of the series of initiatives aimed at developing the housing sector and providing the best financing solutions tailored to borrowers. "
As a result of this agreement, DGF will reduce its rates by 36%, demonstrating its commitment to providing affordable housing solutions to Saudi citizens.
SRC aims to refinance 20% of the Saudi mortgage market, which is expected to reach SR 500 billion in 2020 and SR 800 billion over the next ten years. Since its inception in 2017, SRC has worked tirelessly to promote the development of the housing finance market, as well as standardization within the sector and the development of best practices. – SG
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