Finance Ministry: Housing Finance Law Allows Citizens to Access Subsidized Bank Financing Parallel to Credit Bank Loans

Kuwait City, 5 Nov (KUNA) -- The Ministry of Finance announced that Law-Decree No. 114 of 2026 concerning housing finance for eligible recipients of housing care enables citizens entitled to such support to obtain housing financing from local banks and financing and investment companies supervised by 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 on Thursday, the ministry said the law-decree represents an important step in developing Kuwait’s housing finance system, as it broadens the financing options available to citizens and enhances the participation of the banking and financial sectors in the housing market. 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 for granting financing, including interest rates or returns on non-subsidized financing.

Ahmed Al-Ansari, head of the committee established for this purpose by a ministerial decision, said in a press statement issued by the ministry 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 a building on a government 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 construction on private plots.

Al-Ansari added that financing consists of two integrated parts. The first is subsidized financing, with the state bearing the cost of its interest or returns, which serves as an alternative 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 options. 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.

He clarified that subsidized financing is granted only once to those 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 care, including obtaining any of the bank’s loans.

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, by 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, according to the statement, explained that financing is repaid in equal monthly installments over a period not exceeding 25 years from the date financing is disbursed. 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 a plan from real estate developers or constructing on allocated plots, with the beneficiary bearing interest or returns during the grace period. Beneficiaries also have the right to make early full or partial repayments, with future interest or returns waived on the repaid portion.

Regarding delays and defaults in repayment, Al-Muzaini noted that the law-decree obligates financing entities to issue a notice to the beneficiary according to procedures specified in the executive regulations, and permits rescheduling financing for up to five years in accordance with Central Bank of Kuwait instructions. The executive regulations will include clear procedures that banks and financing entities must follow when a beneficiary defaults, ensuring that default does not result in foreclosure or direct sale of the residence.

He noted that the Kuwait Credit Bank, acting on behalf of the state, is committed to settling the remaining balance of subsidized financing with the funding entity in the event of a beneficiary’s default, while retaining the right to recourse against the beneficiary for any amounts and costs paid, without implying any exemption of the beneficiary from his obligations. He added that the property remains mortgaged as security for the fulfillment of financing obligations until full repayment, and may not be disposed of without prior approval from the Kuwait Credit Bank and the funding entity, provided that the transferee is among eligible housing care beneficiaries who have not previously received housing financing and who will assume the beneficiary’s obligations.

He further stated that the decree-law empowers the Kuwait Credit Bank or any entity designated by the competent minister to purchase housing financings, in whole or in part, from funding 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, thereby providing the necessary liquidity to sustain financing disbursements, contributing to the diversification of investment instruments, and deepening local financial markets.

He emphasized that the decree-law strengthens the partnership between the state, the banking and financial sectors, and the real estate sector, which will positively reflect on family stability and stimulate the national economy.

The decree-law is the outcome of the work of a committee formed by a decision of the Minister of Finance, chaired by Ahmed Al-Ansari, Deputy Managing Director for Investment and Private Sector Projects at the Public Authority for Housing Welfare, and comprising Faisal Al-Muzaini, Director of the Public Debt Department at the Ministry of Finance, along with specialists from relevant entities. (End) A.Kh / A.M.H