Al-Mashari: 'Real Estate Financing' Aims to Provide Dignified Housing

State Minister for Municipal Affairs and State Minister for Housing, Abdul Latif Al-Mutairi, stated that the draft decree-law on housing finance for beneficiaries of residential care, approved by the Council of Ministers at its recent meeting, aims to ensure the sustainable provision of dignified housing for citizens.

Minister Al-Mutairi added after the meeting that the draft decree-law comprises 15 articles. He explained that Article 2 defined the scope of its application and its validity for 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 plot allocated by the Public Authority for Housing Welfare, in accordance with the conditions and controls set by the Authority in housing projects, whether already implemented or currently under construction.

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 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-Mutairi noted that Article 4 outlined the provisions regarding subsidized or non-subsidized housing finance and the repayment mechanism. It permitted 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 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 in accordance with the aforementioned draft decree-law.

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

He highlighted 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 financing granting institutions to notify the beneficiary in case of failure to repay the housing finance provided by those institutions, in accordance with the housing finance contract provisions. It allowed these institutions, in such cases, to either reschedule the housing finance for a period not exceeding five years, in accordance with instructions from the Central Bank of Kuwait, provided that the beneficiary bears the repayment of interest or returns resulting from the rescheduling period.

The Minister said that Article 8 obliged financing granting institutions to register housing finance cases and submit related documents to the Bank, including repayment schedules and default cases, in accordance with the instructions and controls set by the Central Bank in this regard.

He added that Article 9 authorized the Kuwait Credit Bank to act on behalf of the State in signing contracts with financing granting institutions 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 settle the amounts with the subsidized financing granting institutions.

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 financing granting institutions in the event of a beneficiary's default. Meanwhile, Article 11 specified that the Kuwait Credit Bank would obtain a mortgage in exchange for its obligation, on behalf of the State, to financing granting institutions to repay the remaining balance of subsidized housing finance 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 from financing granting institutions. Meanwhile, Article 13 obliged the Central Bank of Kuwait to issue specific rules and controls for granting housing finance and to determine 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 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.