Saudi Real Estate Refinance Co. (SRC), which was launched by the Public Investment Fund (PIF), signed a SAR 1 billion strategic partnership refinancing deal with Deutsche Gulf Finance (DGF).
The deal provides short-term financing and allows acquisition of housing loan portfolios, the refinance company said in a statement on Monday.
It will also allow DGF to offer various Sharia-compliant financing solutions to boost real estate ownership among Saudis.
The first-of-its kind agreement comes as part of SRC’s strategic plan to unlock the local housing finance market and help lenders offer better funding solutions.
SRC was established by the Kingdom’s sovereign wealth fund last October, Argaam reported.
The new company aims to inject liquidity into the secondary mortgage market by acquiring mortgage funds to help broaden the activities of property financing companies, while issuing bonds as securities, supported through mortgage contracts over the short and long term, to real estate financing firms.
In line with Saudi Vision 2030, the PIF is planning to provide the ministry of housing with SAR 75 billion in refinancing over the next five years, reaching up to SAR 170 billion by 2026.
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