Mohamed Farid, Chairperson of the Financial Regulatory Authority (FRA), increased on Tuesday the mortgage finance installment to 50% of the total income, instead of 35-40%, with the aim of increasing the base of beneficiaries.
It comes in line with recent developments, especially inflation rise, which required developing the rules regulating the non-banking financial activities.
The Resolution No. 191 for 2022 amends the Resolution No. 111 for 2015 regulating the rules and standards for practicing mortgage finance. It aims to address the challenges and obstacles facing real estate finance activity by providing solutions and amendments that are commensurate with the economic and financial changes that occur in all non-banking financial markets.
Mohamed Farid said that the amendment included an increase in the value of the financing installment to 50% of the investor’s total income to increase the credit limit, which gives greater flexibility to obtain appropriate financing for owning a housing unit, and that this amendment represents an interaction with the economic changes in the markets to counter the effects of the high inflation rate, as it targets The Authority provides funding for middle-income groups within the framework of the state’s plan for financial inclusion.
Farid added that the Authority is constantly working to find proper solutions and alternatives to improve the level of efficiency and competitiveness of non-banking financial markets, including the real estate finance industry. He said that the Authority is keen to conduct technical discussions with all entities subject to its supervision in order to review the opportunities, challenges and developments facing all relevant parties in order to take action. This would help ensure the continuity of market growth, as the issuance of these amendments was preceded by a community dialogue session called for by the General Authority for Supervision with representatives of all active parties in the market from real estate finance companies as well as real estate developers.
It is worth noting that real estate financing granted by companies amounted to 4.2 billion pounds during the third quarter of 2022, with a growth rate of 71.5% compared to the same period last year.
