Decree-Law Issued for Housing Finance for Eligible Care Recipients

Today, Sunday, Decree-Law No. 114 of 2026 concerning housing finance for eligible beneficiaries of housing care was issued, with the aim of providing housing care in a timely manner and removing the main material obstacles hindering this process.

Article Two of the Decree-Law defined the scope of its application and specified that it applies for the purpose of purchasing a residential unit from a real estate developer in accordance with the provisions of Law No. 118 of 2023 concerning the establishment of companies for creating and economically developing cities or residential areas, as amended by Decree-Law No. (89) of 2025, or for building on a government plot allocated by the Public Authority for Housing Welfare, in accordance with the conditions and controls set by the Authority for housing projects.

Article Three of the aforementioned Decree-Law stipulated the conditions for beneficiaries to qualify for subsidized housing finance, including meeting the general conditions prescribed in the mortgage loan regulations issued by the Kuwait Credit Bank for the purposes of purchase or construction, and not having previously received housing care from the State, whether they were allocated government plots by the Public Authority for Housing Welfare and issued a title deed, or had received any loans granted by the Kuwait Credit Bank, regardless of their value or purpose.

Article Four of the Decree-Law outlined the special provisions regarding housing finance, whether subsidized or non-subsidized, and the repayment mechanism. It allowed for combining both types of finance in accordance with the controls and procedures established by the Central Bank of Kuwait.

The same article clarified that the beneficiary is responsible for repaying the principal of both subsidized and non-subsidized housing finance, as well as the interest or returns accruing on non-subsidized finance, in accordance with the terms of the finance contract and the regulations of the Central Bank of Kuwait, while noting that the State bears the cost of interest or returns on subsidized housing finance in accordance with the provisions of this Decree-Law.

Article Five of the aforementioned Decree-Law determined that all housing finance 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 housing finance by the granting institution, in accordance with the instructions and controls set by the Central Bank of Kuwait.

Article Six of this Decree-Law referred the procedures for disbursing housing finance for purchasing a residential unit from a real estate developer to the provisions of Law No. 118 of 2023 concerning the establishment of companies for creating and economically developing cities or residential areas. It also specified that housing finance for the purpose of construction on a government plot allocated by the Public Authority shall be disbursed in stages and in accordance with the rules established by the Bank.

Article Seven of the Decree-Law stipulated the obligation of granting institutions to notify the beneficiary in case of failure to repay the housing finance provided by those institutions, in accordance with the terms of the housing finance contract. It authorized these institutions, in such cases, either to reschedule the housing finance 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 interest or returns resulting from the rescheduling period for both subsidized and non-subsidized housing finance, or to take legal action against the beneficiary.

Article 9 of the aforementioned Decree-Law authorizes the Kuwait Credit Bank to act on behalf of the State in signing contracts with financing providers, within the limits of the provisions of this Decree-Law and its Executive Regulation. It also obligates the Ministry of Finance to pay the interest or returns accruing on the subsidized housing finance to the Kuwait Credit Bank from the General Reserve Account, which shall then settle these amounts with the financing providers in accordance with the conditions and procedures specified in the Executive Regulation.

Article 10 stipulates that the Bank, acting on behalf of the State, is liable to the housing finance providers for repaying the outstanding balance of the subsidized housing finance in the event that the beneficiary defaults on repayment.

Article 11 clarifies that the Bank shall obtain a mortgage in consideration for its commitment, on behalf of the State, to the housing finance providers to cover the remaining balance of the subsidized housing finance in case of beneficiary default. It further states that the mortgage shall only be established through an official mortgage contract.

The same article emphasizes that the property must be precisely and specifically identified in the mortgage contract; otherwise, the mortgage shall be deemed void. The registration of the mortgage securing the housing finance shall remain in effect for the entire duration of the contract until the debt is fully settled.

It also confirms that the beneficiary shall not be permitted to dispose of the mortgaged property through sale, gift, or any other form of disposition, nor to establish any real right over it, without obtaining prior approval from both the Bank and the housing finance provider. Furthermore, the transferee must be eligible for housing support and must not have previously received housing finance, and the transferee must accept to assume the obligations arising from the housing finance contract in place of the original beneficiary.

Article 12 of the Decree grants the Kuwait Credit Bank or any entity designated by the competent Minister the right to purchase, either in full or in part, the housing finance provided to beneficiaries by financing providers, to securitize and document it, and to sell it to investors. This is considered one of the investment instruments that enhance the economic environment, in accordance with the procedures set forth in the Executive Regulation and the regulations of the Central Bank of Kuwait and the Capital Markets Authority.

Article 13 obligates the Central Bank of Kuwait to issue the rules and regulations governing the provision of housing finance and to determine the interest rates or returns applicable to non-subsidized finance.

Article 14 of the aforementioned Decree-Law underscores the necessity of issuing the Executive Regulation for the draft Decree-Law, based on a proposal from the competent Minister, within six months from the date 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 Regulation in the Official Gazette.