Housing Minister: Real Estate Financing Law Aims to Ensure the Sustainable Provision of Dignified Housing for Citizens

• The Kuwaiti Credit Bank, acting on behalf of the state, signs contracts with financing entities

(KUNA) – State Minister for Municipal Affairs and State Minister for Housing Affairs, Abdul-Latif Al-Mashari, stated that the draft decree-law on real estate financing for beneficiaries of housing care, approved by the Council of Ministers in its meeting today, Tuesday, aims to ensure the sustainable provision of dignified housing for Kuwaiti citizens.

Minister Al-Mashari added in a statement to the Kuwait News Agency (KUNA) following the meeting that the draft decree-law comprises 15 articles. He explained that Article 2 defines the scope of application and applicability of its provisions 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 constructing a government-allocated plot from the Public Authority for Housing Welfare, in accordance with the conditions and regulations established by the Authority for housing projects, whether already completed or currently under implementation.

He noted that Article 3 of the draft decree-law specifies the eligibility conditions for beneficiaries to receive supported real estate financing. These conditions include meeting the general requirements set forth in the real estate loan regulations issued by the Kuwaiti Credit Bank for the purposes of purchase or construction, and not having previously benefited from state-provided housing care.

Al-Mashari stated that Article 4 outlines the provisions governing supported or non-supported real estate financing and the repayment mechanism, stipulating that the two may be combined in accordance with the regulations and procedures established by the Central Bank of Kuwait.

He clarified that the same article specifies that the beneficiary is responsible for repaying the principal of both supported and non-supported real estate financing, as well as the interest or returns accruing on the non-supported financing, in accordance with the terms of the financing contract and the Central Bank’s regulations, while the state bears the cost of the interest or returns accruing on the supported real estate financing, in accordance with the provisions of the aforementioned draft decree-law.

He added that Article 5 stipulates that all real estate financings shall be repaid in equal monthly installments, with the repayment period not exceeding 25 years from the date of commencement of disbursement of the real estate financing by the financing entity, in accordance with the instructions and regulations established by the Central Bank.

He pointed out that Article 6 refers the procedures for disbursing real estate financing for the purchase of a residential unit from a real estate developer to the provisions of Law No. (118) of 2023 on the establishment of companies for the construction of cities or residential areas and their economic development. The same article also states that real estate financing for the purpose of construction on a government-allocated plot from the Public Authority for Housing Welfare shall be disbursed in stages and in accordance with the rules established by the Central Bank.

He noted that Article 7 specifies the obligation of financing entities to issue a notice to the beneficiary in the event of non-compliance with the repayment of the real estate financing provided by such entities, in accordance with the provisions of the real estate financing contract. In such cases, these entities are permitted either to restructure the real estate financing for a period not exceeding five years, in accordance with the instructions of the Central Bank of Kuwait, with the beneficiary bearing the repayment of the interest or returns resulting from the restructuring period.

The Minister stated that Article 8 obligates financing entities to register real estate financing cases and submit related documents to the bank, including repayment schedules and cases of default, in accordance with the instructions and regulations established by the Central Bank in this regard.

He added that Article 9 empowered the Kuwaiti Credit Bank to act as the state’s agent in signing contracts with financing providers, within the framework of the draft decree-law and its executive regulations. The article also obligated the Ministry of Finance to pay the interest or returns accruing on the supported real estate financing extended by the Kuwaiti Credit Bank, using funds from the General Reserve Account, which the ministry is responsible for settling with the supported financing providers.

He clarified that Article 10 stipulated the Kuwaiti Credit Bank’s obligation, on behalf of the state, to repay the outstanding balance of supported real estate financing to the financing providers in the event of a beneficiary’s default. Meanwhile, Article 11 specified that the Kuwaiti Credit Bank would obtain a mortgage on the property in exchange for its commitment, on behalf of the state, to repay the remaining balance of supported real estate financing to the providers in case of beneficiary default. The article further noted that a property mortgage is only valid if established through an official mortgage contract.

He explained that Article 12 granted the Kuwaiti Credit Bank, or any entity designated by the competent minister, the right to purchase all or part of the real estate financing provided to beneficiaries by the financing providers. In contrast, Article 13 obligated the Central Bank of Kuwait to issue the specific rules and regulations governing the provision of real estate financing and to determine the interest or return rates applicable to non-supported financing.

He noted 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, meanwhile, specified that the provisions of the draft decree-law would apply to beneficiaries from the date the executive regulations are published in the Official Gazette.