"Real Estate Financing"... support through banks

The Ministry of Finance announced that Legislative Decree No. 114 of 2026 concerning housing finance for beneficiaries of residential care enables eligible citizens to obtain housing financing from local banks and financing and investment companies subject to the supervision of the Central Bank of Kuwait, as an alternative option to the construction and purchase loans offered by the Kuwait Credit Bank. The decree’s provisions will take effect from the date its executive regulations are published in the Official Gazette.

In a press statement, the ministry said the legislative decree represents an important step in developing Kuwait’s housing finance system, as it expands the financing options available to citizens and enhances the participation of the banking and financial sectors in the housing sector. The executive regulations will be issued within six months from the date of publication of the legislative decree, alongside the rules and regulations issued by the Central Bank of Kuwait regarding the granting of financing, including interest rates or returns on non-subsidized financing.

Ahmed Al-Ansari, head of the committee formed for this purpose by ministerial decision, stated that financing is limited to two specific purposes: purchasing a residential unit from real estate developers accredited by the Public Authority for Housing Welfare, or constructing on a government plot allocated by the authority. The provisions of the legislative decree do not apply to other purposes such as expansion, renovation, purchasing from non-accredited developers, or construction on private plots.

Al-Ansari added that the financing consists of two integrated parts. The first is subsidized financing, where the state bears the cost of its interest or returns, serving as an alternative option to the construction and purchase loans from the Kuwait Credit Bank, not a replacement for them. Citizens retain the right to choose between the two pathways. The second part is additional non-subsidized financing, limited to buyers of residential units from real estate developers, provided by financing entities according to their credit terms, with state support restricted to the subsidized portion.

For his part, committee member Faisal Al-Muzaini clarified that financing is repaid through equal monthly installments over a period not exceeding 25 years from the date financing disbursement begins. Beneficiaries may be granted a grace period, counted within this duration, during which repayment of the principal is deferred in cases of purchasing units on plan from real estate developers or constructing on allocated plots. However, beneficiaries must bear the interest or returns during the grace period. Beneficiaries also have the right to make full or partial early repayment, with future interest or returns waived on the repaid portion. Refinancing or rescheduling of the loan is permitted for a period not exceeding five years.

For more details: The legislative decree represents an important step in developing Kuwait’s housing finance system. The Ministry of Finance stated that “housing finance” enables citizens to obtain subsidized financing through banks, alongside loans from the Kuwait Credit Bank.

The Ministry of Finance clarified that Legislative Decree No. (114) of 2026 concerning housing finance for eligible recipients of housing assistance allows eligible citizens to obtain housing financing from local banks and financing and investment companies subject to the supervision of the Central Bank of Kuwait, as an alternative option to the construction and purchase loans from the Kuwait Credit Bank. The decree’s provisions will take effect from the date its executive regulations are published in the Official Gazette.

The Ministry noted that the legislative decree represents a significant step in developing Kuwait’s housing finance system, as it expands the financing options available to citizens and enhances the participation of the banking and financial sectors in the housing sector. The executive regulations will be issued within six months from the date of the decree’s publication, alongside the rules and regulations issued by the Central Bank of Kuwait regarding the granting of financing, including the interest rates or returns on non-subsidized financing.

The legislative decree is the result of the work of a committee formed by a decision of the Minister of Finance, chaired by Eng. Ahmed Mohammed Al-Ansari, Deputy General Manager for Investment and Private Sector Projects at the Public Authority for Housing Welfare, and comprising Feisal Fahad Al-Muzaini, Director of the Public Debt Department at the Ministry of Finance, along with specialists from relevant authorities.

Eng. Ahmed Al-Ansari, Chairman of the Committee, clarified that financing is limited to two specific purposes: purchasing a residential unit from developers accredited by the Public Authority for Housing Welfare, or constructing a residential plot allocated by the Authority. The provisions of the legislative decree do not apply to other purposes, such as expansion, renovation, purchasing from non-accredited developers, or construction on private plots.

Al-Ansari added that financing consists of two integrated components: the first is subsidized financing, where the state bears the cost of its interest or returns, serving as an alternative option to the construction and purchase loans from the Kuwait Credit Bank, not a replacement for them, as citizens retain the right to choose between the two pathways. The second component is additional non-subsidized financing, limited to buyers of residential units from accredited developers, provided by financing institutions according to their credit terms, with state support restricted to the subsidized portion.

He explained that subsidized financing is granted only once to individuals who meet the conditions stipulated in the mortgage loan regulations of the Kuwait Credit Bank for the purposes of purchase or construction, and who have not previously benefited from state housing assistance, including obtaining any loans from the bank.

Al-Ansari emphasized that the legislative decree complements Law No. (118) of 2023 concerning the establishment of companies for the development of residential cities or areas and their economic development, and its amendments, thereby linking the development of housing supply with the provision of necessary financing tools to enable citizens to access housing.

For his part, Committee member Feisal Al-Muzaini clarified that financing is repaid through equal monthly installments over a period not exceeding 25 years from the date financing is disbursed. Beneficiaries may be granted a grace period, which counts toward this duration, during which the repayment of the principal is deferred in cases of purchasing units on plan from developers or constructing a plot. However, beneficiaries remain responsible for interest or returns during the grace period. Beneficiaries also have the right to make full or partial early repayments, with future interest or returns waived on the repaid portion.

Regarding cases of delay and default in repayment, Al-Muzaini stated that the legislative decree obligates financing institutions to issue a formal notice to beneficiaries according to procedures specified in the executive regulations. It also permits the rescheduling of financing for a period not exceeding five years, in accordance with instructions from the Central Bank of Kuwait. The executive regulations will include clear procedures that banks and financing institutions must follow in cases of default.

the beneficiary, so that default does not result in the foreclosure or direct sale of the residence. Al-Muzaini noted that Kuwait Credit Bank, acting on behalf of the state, is committed to settling the remaining balance of the subsidized financing with the funding entity in the event of the beneficiary’s default, while retaining the right to seek recourse against the beneficiary for the amounts and costs paid, without implying any exemption of the beneficiary from his obligations. Al-Muzaini pointed out that the property remains mortgaged as security for the fulfillment of financing obligations until they are fully settled, and it may not be disposed of without prior approval from Kuwait Credit Bank and the funding entity. The transferee must be among the eligible housing care recipients who have not previously obtained housing financing, and must assume the beneficiary’s obligations. Al-Muzaini added that the decree-law empowers Kuwait Credit Bank, or any entity designated by the competent minister, to purchase housing financings in full or in part from the granting entities, securitize or tokenize them, and offer them to investors, in accordance with the regulations of the Central Bank of Kuwait and the Capital Markets Authority. This provides the necessary liquidity to sustain the provision of financing, contributes to diversifying investment instruments, and deepens local financial markets. Al-Muzaini concluded by emphasizing that the decree-law strengthens the partnership between the state, the banking and financial sectors, and the real estate sector, thereby contributing to family stability and revitalizing the national economy.