Decree-Law Issued on Housing Finance for Eligible Beneficiaries

- The beneficiary is responsible for repaying the principal of both subsidized and non-subsidized housing finance, as well as any interest or returns accruing on the non-subsidized financing.

- All housing finance must be repaid in equal monthly installments, with the repayment period not exceeding 25 years for grants.

- The beneficiary is prohibited from disposing of the mortgaged property through sale or gift without prior approval.

- Granting entities are obligated to issue a notice to the beneficiary in the event of his failure to repay the financing provided to him.

- The Kuwait Credit Bank is authorized to act on behalf of the State in signing contracts with financing entities.

- The Bank, acting on behalf of the State, is committed to repaying the outstanding balance of the subsidized financing to the granting entities in the event of the beneficiary’s default.

Decree-Law No. 114 of 2026 concerning housing finance for eligible recipients of residential care was issued today, Sunday, with the aim of providing residential care in a timely manner and removing the major material obstacles hindering this objective.

Article Two of the Decree-Law defined the scope of its application and specified 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 concerning the establishment of companies for the creation and economic development of 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 the beneficiary’s eligibility for subsidized housing finance, which include meeting the general conditions prescribed in the mortgage loans regulations issued by the Kuwait Credit Bank for the purposes of purchase or construction, and not having previously received residential care from the State, whether by being allocated a government plot by the Public Authority for Housing Welfare and having received a title deed, or by having obtained any loans granted by the (Kuwait Credit Bank), regardless of their value or purpose.

Article Four of the Decree-Law outlined the specific provisions regarding housing finance, whether subsidized or non-subsidized, and the repayment mechanism, allowing for the combination of both 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 any interest or returns accruing on the non-subsidized financing, in accordance with the terms of the financing contract and the Central Bank of Kuwait’s regulations, while noting that the State bears the cost of interest or returns on the subsidized housing finance in accordance with the provisions of this Decree-Law.

Article Five of the aforementioned Decree-Law determined that all housing finance must 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 entity, 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 the purpose of 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 also specified that housing finance for the purpose of construction on the government plot allocated by the Authority shall be disbursed in stages and in accordance with the rules established by the Bank.

Article Seven of the Decree-Law stipulates that financing-granting entities are obligated to issue a notice to the beneficiary in the event of non-compliance with the repayment of the housing finance provided to them, in accordance with the terms of the housing finance contract. In such cases, these entities are authorized 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 interest or returns arising from the rescheduling period, whether the housing finance is subsidized or non-subsidized, or to take legal action against the beneficiary.

Article Nine of the aforementioned Decree-Law empowers the Kuwait Credit Bank to act on behalf of the State in signing contracts with financing-granting entities within the framework of this Decree-Law and its Executive Regulations. It also obligates the Ministry of Finance to pay the interest or returns accrued on subsidized housing finance to the Kuwait Credit Bank from the General Reserve Fund, which will then disburse these amounts to the subsidized financing-granting entities in accordance with the conditions and procedures specified in the Executive Regulations.

Article Ten stipulates that the Bank, acting on behalf of the State, is liable to the housing finance-granting entities for the remaining balance of the subsidized housing finance in the event of the beneficiary’s default on repayment.

Article Eleven clarifies that the Bank obtains the mortgage in exchange for its commitment, on behalf of the State, to the housing finance-granting entities to settle the remaining balance of the subsidized housing finance in case of the beneficiary’s default. It further states that the mortgage is only valid if executed 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 is null and void. The registration of the mortgage securing the housing finance remains in effect throughout the contract period until the debt is fully settled.

It also confirms that the beneficiary is not permitted to dispose of the mortgaged property through sale, gift, or other means, or to establish any real right over it, without prior approval from both the Bank and the housing finance-granting entity. Furthermore, the transferee must be eligible for housing support and must not have previously received housing finance, and must accept the assumption of the obligations arising from the housing finance contract by the transferee.

Article Twelve of the Decree-Law grants 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 financing-granting entities, securitize it, tokenize it, sell it to investors, and repurchase it as an investment tool that enhances the economic environment, in accordance with the procedures outlined in the Executive Regulations and the regulations of the Central Bank of Kuwait and the Capital Markets Authority.

Article Thirteen obligates the Central Bank of Kuwait to issue specific rules and regulations regarding the granting of housing finance and to determine the interest or return rates applicable to non-subsidized housing finance.

Article Fourteen of the aforementioned Decree-Law emphasizes the necessity of issuing the Executive Regulations 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 Fifteen specifies that the provisions of the present draft Decree-Law shall apply to beneficiaries from the date of publication of the Executive Regulations in the Official Gazette.