Shoura suggests housing loan waiver for the hard-pressed
The Shoura Council has demanded relieving borrowers with limited incomes from keeping up repayment on their mortgages.
The council sought the support of the Real Estate Development Fund (REDF), which would bear the brunt of such a waiver, and the Finance and Social Affairs Ministries in making the proposal a reality.
A special committee has emphasized the need to relieve borrowers who cannot afford repayment while compensating the fund for its losses.
Officials from the financial affairs committee at the REDF, however, have argued that the fund would not be able to cover the SR24 billion worth of loans incurred by borrowers.
“The fund already grants loans to citizens without income and those with insolvency issues,” it said.
A committee at the Finance Ministry has demanded the speedy repayment of SR39 billion, the difference between what has been made available to borrowers and what currently exists within the fund.
The human resource committee at the council, meanwhile, emphasized that systems within the fund must be updated and brought up to date with the needs of the day.
The REDF has given away more than 811,000 loans worth SR263 billion for 975,000 residential units since its establishment in 1974.
The fund offers long-term, interest-free loans for citizens to help them build residential units.
Loans are repaid over a 25-year period. The fund also extends investment loans to encourage citizens to build investment complexes that include offices and showrooms, in addition to residential units.
Such loans cover 50 percent of total construction costs.