Cabinet expands access to mortgage assistance

Doaa Farid
2 Min Read
Low-income housing is witnessing a low turnout due to the inability of Egypt’s youth to pay as well as high interest rates. (AFP Photo)
Residents of Cairo's slums have been voicing demands for better housing (AFP Photo)
Residents of Cairo’s slums have been voicing demands for better housing
(AFP Photo)

The cabinet approved a draft law Thursday amending the Real Estate Finance Law, according to a cabinet statement.

According to the amended law, beneficiaries of the Mortgage Finance Fund will be expanded, making it easier for low-income citizens to access assistance. The law also defines which low-income projects are eligible for financing.

The amount of mortgage finance subsidy that the government grants to low-income families will also increase under the revised law. The subsidy, commenced in 2003, is designed to help low-income families whose monthly income doesn’t exceed EGP 2,500.

Mortgage finance involves the “purchase, construction, restoration or development of houses, administrative units, service foundations and any building designed for practising trade”, according to the Egyptian Financial Supervisory Authority (EFSA), which organises and regulates the programme.

Mortgage finance companies, under the amended law, will be exempted from paying taxes that should be paid after lending investors a real estate fund.

In January, the EFSA and the New Urban Communities Authority (NUCA) signed an agreement with the aim of simplifying property registration in new cities, providing better access to housing loans and ensuring the rights of mortgage finance companies.

Hoping to boost the real estate sector, several investment groups from the Gulf region signed investment agreements with their Egyptian counterparts in January, the Ministry of Housing reported at the time.

The real estate market is showing signs of improvement as the Egyptian economy moved toward recovery in the fourth quarter (Q4) of 2013, according to a February report from real estate investment and advisory firm Jones Lang LaSalle.

Around 190,000 square miles of retail space was introduced in Q4 2013, the retail market witnessed the “largest surge” in retail construction supply since 2011, according to the report.

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