Housing care beneficiaries' real estate financing: 15 articles to regulate subsidized financing and repayment mechanisms

State Minister for Municipal Affairs and State Minister for Housing Affairs Abdul-Latif Al-Mashari stated that the draft decree-law on real estate financing for beneficiaries of housing care, approved by the Council of Ministers in its meeting today, Tuesday, aims to ensure the sustainable provision of dignified housing for Kuwaiti citizens.

Minister Al-Mashari added in a statement to the Kuwait News Agency (KUNA) following the meeting that the draft decree-law comprises 15 articles. He explained that Article 2 defines the scope of application and the applicability of its provisions for the purpose of purchasing a residential unit from a real estate developer in accordance with the provisions of Law No. (118) of 2023, as amended by Decree-Law No. (89) of 2025, or for constructing a government-allocated plot from the Public Authority for Housing Care, subject to the conditions and regulations established by the Authority for housing projects, whether already completed or currently under implementation.

He noted that Article 3 of the draft decree-law specifies the eligibility conditions for beneficiaries to receive supported real estate financing. These conditions include meeting the general requirements set forth in the real estate loan regulations issued by the Kuwait Finance House for the purposes of purchase or construction, and not having previously benefited from state-provided housing care.

He clarified that the same article stipulates that the beneficiary is responsible for repaying the principal of both supported and unsupported real estate financing, as well as the interest or returns accruing on the unsupported financing, in accordance with the terms of the financing contract and the regulations of the Central Bank. It also notes that the state shall bear the cost of the interest or returns accruing on the supported real estate financing, in accordance with the provisions of the aforementioned draft decree-law.

He stated that Article 5 specifies that all real estate financings shall be repaid in equal monthly installments, with the repayment period not exceeding 25 years from the date of the commencement of disbursement of the real estate financing by the financing entity, in accordance with the instructions and regulations established by the Central Bank.

He pointed out that Article 6 refers the procedures for disbursing real estate financing for the purchase of a residential unit from a real estate developer to the provisions of Law No. (118) of 2023 concerning the establishment of companies for the development of cities or residential areas and their economic development. The same article also states that real estate financing for the purpose of construction on a government-allocated plot from the Authority shall be disbursed in stages and in accordance with the rules established by the Central Bank.

He indicated that Article 7 outlines the obligation of financing entities to issue a notice to the beneficiary in case of non-compliance with the repayment of the real estate financing provided by such entities, in accordance with the provisions of the real estate financing contract. In such cases, it permits these entities to either restructure the real estate financing for a period not exceeding five years, in accordance with the instructions of the Central Bank of Kuwait, with the beneficiary bearing the repayment of the interest or returns resulting from the restructuring period of the real estate financing.

The Minister stated that Article 8 obligates financing entities to register real estate financing cases and submit related documents to the bank, including repayment schedules and default cases, in accordance with the instructions and regulations established by the Central Bank in this regard.

He added that Article 9 authorizes the Kuwait Finance House to act as the state’s representative in signing contracts with financing entities within the scope of the provisions of the draft decree-law and its executive regulations. It also obligates the Ministry of Finance to pay the interest or returns accruing on the supported real estate financing to the Kuwait Finance House from the General Reserve Account, which the Kuwait Finance House shall then settle with the supported financing entities.

He clarified that Article 10 stipulates the Kuwaiti Credit Bank’s obligation, on behalf of the state, to lenders of real estate financing to settle the remaining balance of supported real estate financing in the event of the beneficiary’s default. Article 11, meanwhile, specifies that the Kuwaiti Credit Bank obtains a mortgage on the property in exchange for its commitment, on behalf of the state, to lenders of real estate financing to settle the remaining balance of supported real estate financing in the event of the beneficiary’s default, and that a mortgage on the property is only valid if established through an official mortgage contract.

He noted that Article 12 grants the Kuwaiti Credit Bank, or any entity designated by the competent minister, the right to purchase all or part of the real estate financing provided to beneficiaries by financing lenders. Article 13, in turn, obliges the Central Bank of Kuwait to issue the rules and regulations governing the provision of real estate financing and to determine the interest or return rates applicable to non-supported financing.

He added that Article 14 emphasizes the necessity of issuing the executive regulations for the draft decree-law by decree, based on a proposal from the competent minister, within six months of its publication in the Official Gazette. Article 15 specifies that the provisions of the draft decree-law shall apply to beneficiaries from the date of publication of the executive regulations in the Official Gazette.