The United Bank of Egypt will launch a project to finance 1,000 housing units in Suez through a mortgage system according the Central Bank of Egypt’s (CBE) initiative to house low- and middle-income individuals for a period of up to 20 years, the bank announced in a statement last week.
The United Bank’s contribution will be in the funding provided by the low-income housing fund and the Ministry of Housing and Urban Communities, and falls under the larger One Million units project. The government claims that the project will increase living standards, provide adequate housing, and eliminate informal settlements.
According to Acting Chairman of the Bank United Farag Abdel Hamed, the CBE’s Mortgage Initiative represents a great starting point at an economic and social level.
In late December, the CBE announced a mortgage initiative that allowed banks to receive a discount on the mortgage prices for the next 20 years so that they can later give loans back with deducted annual earnings at 7% for lower-income citizens. There will also be deducted annual earning at 8% for middle-income citizens, on condition that the banks use the money to buy units for the housing units in the new urban communities.
The CBE’s mortgage initiative aims to bolster the real estate market and create a cash flow to increase economic activity and eliminate funding obstacles. Abdel Hamed said the initiative also aims to ease inflation since the unit price and the yield on it are fixed throughout the financing period, which could be 20 years.