Finance Ministry: Housing Finance law allows citizens to access subsidized bank financing parallel to Credit Bank loans
Press coverage 2 newspapers covered this event: Al-Jarida · KUNA →
The new housing finance option runs parallel to Credit Bank loans, offering both subsidized and non-subsidized options under the supervision of the Central Bank of Kuwait.
Translated by Qiyas from الجريدة — Original source
The Ministry of Finance clarified that Law-Decree No. (114) of 2026 concerning housing finance for eligible recipients of residential care allows citizens entitled to such support to obtain housing financing from local banks and financing and investment companies subject to the supervision of the Central Bank of Kuwait, as a parallel 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.
The Ministry noted that the law-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 industry. The executive regulations will be issued within six months of the publication of the law-decree, 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 law-decree is the result of work by a committee formed by a decision of the Minister of Finance, chaired by Ahmed Mohammed Al-Ansari, Deputy Managing Director for Investment and Private Sector Projects at the Public Authority for Housing Welfare, and including Faisal Fahad Al-Muzaini, Director of the Public Debt Department at the Ministry of Finance, along with specialists from relevant entities.
Committee Chairman Ahmed Al-Ansari clarified that financing is restricted 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 law-decree do not apply to other purposes, such as expansion, renovation, purchasing from non-accredited developers, or building on private plots.
Al-Ansari added that the financing consists of two integrated components: the first is subsidized financing, where the state bears the cost of its interest or returns. This serves as a parallel 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, available only to buyers of residential units from accredited developers, provided by financing entities according to their credit terms. State support is limited to the subsidized portion.
Al-Ansari explained that subsidized financing is granted only once to individuals who meet the conditions stipulated in the mortgage regulations of the Kuwait Credit Bank for the purposes of purchase or construction, and who have not previously benefited from state residential care, including receiving any loans from the bank.
Al-Ansari emphasized that the law-decree complements Law No. (118) of 2023 concerning the establishment of companies for the creation and economic development of residential cities or areas, 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 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, which is counted within this duration, during which the repayment of the principal amount is deferred in cases of purchasing units on a plan from accredited developers or constructing a plot. However, the beneficiary remains responsible for paying 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 for the repaid portion.
Regarding cases of delayed and defaulted repayments, Al-Muzaini clarified that the Decree-Law obliged funding entities to issue a notice to the beneficiary in accordance with the procedures specified in the executive regulations, and permitted the rescheduling of financing for a period not exceeding five years, in line with Central Bank of Kuwait directives. The executive regulations must include clear procedures that banks and funding entities must adhere to in the event of a beneficiary’s default, ensuring that such default does not lead to the foreclosure of the mortgage or the direct sale of the residence.
Al-Muzaini noted that the Kuwait Credit Bank, acting on behalf of the State, is committed to settling the remaining balance of the subsidized financing owed to the funding entity in case of beneficiary default, while retaining the right to recourse against the beneficiary for all amounts and costs paid, without implying any exemption of the beneficiary from their obligations.
He further emphasized that the property remains mortgaged as security for the fulfillment of financing obligations until they are fully settled, and no disposal of the property is permitted without prior approval from both the Kuwait Credit Bank and the funding entity. The transferee must be an eligible recipient of housing care who has not previously received housing financing, and must assume the beneficiary’s obligations.
Al-Muzaini concluded by stressing 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 stimulating the national economy.
