Saudi Arabia’s first mortgage-refinancing firm has started approaching banks to buy their mortgage portfolios as the Kingdom aims to boost lending for homes, Bloomberg reported citing Housing Minister Majed Al Hogail.
“The value of mortgage portfolios in the banks is currently around 116 billion riyals,” the minister was quoted as saying. “We will start buying shares of that gradually.”
The new firm, which is still waiting for central bank approval for some products before it can formally launch its operations, will have SAR 5 billion ($1.3 billion) of its own capital and will work with the government’s Real Estate Development Fund (REDF) to invest another SAR 5 billion buying mortgage portfolios.
“We expect to start buying the portfolios from the banks in late May or mid-June, and hopefully by the end of the year, we will securitize this portfolio,” Al Hogail reportedly said.
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