CBE supports under-construction units and stimulates to build of premium House
The Financial Regulator of Egypt (FRA) held a Mortgage Finance Advisory Committee meeting last week to discuss proposals on how to develop the mortgage finance system, overcome all obstacles and strengthen mortgage finance companies.
The value of financing provided by mortgage lenders amounted to EGP 8.1 billion in 2021, reaching almost EGP 4 billion in the first quarter of the current year. The committee aims for mortgage financing in Egypt to reach about EGP 16 billion by 2026.
FRA Chair Mohamed Omran explained that the meeting discussed proposals submitted by the Real Estate Development Chamber of the Confederation of Egyptian Industry and the Egyptian Mortgage Association. It has been agreed to produce a set of recommendations which will be presented to the Board of the Authority at its first meeting once it is formed to consider their approval. These recommendations include considering the unit as a guarantor of the mortgage and removing the 40% installment limit on income.
Omran added that as long as the provisions of the Mortgage Financing Act and its implementing regulations allow financing of units under construction in accordance with the relevant authority’s regulations, the demands of real estate developers in relation to the provision of financing for housing units under construction have been met, taking into account the percentages of completion at the time construction of units.
Real estate exporters said that since 2007, the mortgage financing law in force has not prevented the granting of financing for units under construction, but due to the lack of a payment risk guarantee mechanism, companies have stopped financing unfinished real estate units.