Real estate Financing (%70)
| No: 371000064719 | Date(g): 15/3/2016 | Date(h): 7/6/1437 |
Translated Document
With reference to Article 11 of the Implementing Regulations of the Real Estate Finance Law issued by Royal Decree No. M/50 dated 13/08/1433H, which states that "The real estate finance entity shall not extend credit on any form of finance exceeding 70 percent of the value of the dwelling subject of the real estate finance contract. SAMA may change this percentage according to prevailing market conditions'. and given that some banks are contracting with real estate financing companies to acquire real estate finance assets or the rights arising from such assets, emphasizing the importance of fully complying with the provisions of the aforementioned article.
We would like to clarify that banks are not allowed to acquire real estate finance assets or the rights arising from such assets if they do not meet the provisions of the aforementioned article. This applies in cases of disposition without recourse or with partial recourse, ensuring that the existing financing amount for the assets (or the rights arising from them) at the time of acquisition does not exceed 70% of the value of the housing unit subject to the real estate finance contract at the time of contract execution. It is also important to comply with the Rules for Regulating the Disposition of Financing Assets or the Rights Arising Therefrom issued by SAMA.