Housing Minister: Draft Law on Real Estate Financing aims to sustain provision of dignified housing for citizens

Kuwait City, 22 September (KUNA) – Minister of State for Municipal Affairs and Minister of State for Housing Affairs, Abdul Latif Al-Musharraf, stated that the draft decree-law concerning housing finance for beneficiaries of residential care, which the Cabinet approved at its meeting on Tuesday, aims to ensure the sustainable provision of dignified housing for Kuwaiti citizens.

In a statement to the Kuwait News Agency (KUNA) following the meeting, Minister Al-Musharraf explained that the draft decree-law comprises 15 articles. He noted that Article 2 defined the scope of its application and its validity 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 building on a government plot allocated by the Public Authority for Housing Welfare, subject to the conditions and regulations set by the Authority for housing projects, whether already implemented or currently under implementation.

He pointed out that Article 3 of the draft decree-law specified the conditions for beneficiaries to qualify for subsidized housing finance. These conditions include meeting the general requirements stipulated in the mortgage loan regulations issued by the Kuwait Credit Bank for the purposes of purchase or construction, and not having previously received residential care from the state.

Minister Al-Musharraf stated that Article 4 outlined the provisions for subsidized and non-subsidized housing finance and the repayment mechanism. It allowed for combining both types of finance in accordance with the regulations and procedures established by the Central Bank of Kuwait. The article further 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 the non-subsidized finance, in accordance with the finance contract terms and Central Bank regulations, while noting that the state bears the cost of interest or returns on the subsidized housing finance as per the aforementioned draft decree-law.

He added that Article 5 stipulated that all housing finance must be repaid in equal monthly installments, with the repayment period not exceeding 25 years from the date of disbursement by the granting entity, in accordance with instructions and regulations set by the Central Bank.

He noted that Article 6 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 the creation and economic development of cities or residential areas. The same article stated that housing finance for construction on a government plot allocated by the Authority would be disbursed in stages and in accordance with the rules established by the Central Bank.

He indicated that Article 7 outlined the obligation of granting entities to notify beneficiaries in case of failure to repay the housing finance provided, in accordance with the terms of the housing finance contract. In such cases, these entities were authorized to either reschedule the housing finance for a period not exceeding five years, in accordance with Central Bank of Kuwait instructions, provided that the beneficiary bears the interest or returns resulting from the rescheduling period.

The minister said that Article 8 obliged granting entities to register housing finance cases and submit related documents to the bank, including repayment schedules and default cases, in accordance with instructions and regulations set by the Central Bank.

He added that Article 9 authorized the Kuwait Credit Bank to act on behalf of the state in signing contracts with granting entities within the limits of the draft decree-law and its executive regulations. It also obliged the Ministry of Finance to pay the interest or returns on subsidized housing finance to the Kuwait Credit Bank from the General Reserve Account, which would then disburse the funds to the subsidized granting entities.

He clarified that Article 10 stipulated the obligation of the Kuwait Credit Bank, on behalf of the state, to repay the remaining balance of subsidized housing finance to granting entities in the event of a beneficiary’s default. Meanwhile, Article 11 stated that the Kuwait Credit Bank would obtain a mortgage in exchange for its obligation to repay the remaining balance of subsidized housing finance to granting entities in case of beneficiary default, and that the mortgage would only be established through an official mortgage contract.

He explained that Article 12 granted the Kuwait Credit Bank or any entity designated by the competent minister the right to purchase all or part of the housing finance provided to beneficiaries by granting entities. Article 13, meanwhile, obliged the Central Bank of Kuwait to issue specific rules and regulations for granting housing finance and determining the interest or return rates applicable to non-subsidized finance.

He mentioned that Article 14 emphasized 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 specified that the provisions of the draft decree-law would apply to beneficiaries from the date of publication of the executive regulations in the Official Gazette. (End) J.Y. / A.M.H.