Officially... Decree-law issued to regulate housing finance for eligible beneficiaries

- Aims to ensure the sustainable provision of dignified housing and includes 15 articles regulating financing mechanisms and eligibility criteria

- The State covers the interest on subsidized financing and repayment in monthly installments for up to 25 years

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- Allows combining subsidized and non-subsidized financing and mortgaging the property until the debt is settled

Decree-Law No. 114 of 2026 concerning housing finance for housing care beneficiaries was issued today, Sunday, with the aim of providing housing care in a timely manner and removing the major financial obstacles hindering it.

According to the explanatory memorandum of the Decree-Law, which comprises 15 articles, it aims to ensure the sustainable provision of dignified housing for Kuwaiti citizens in the near future.

Article Two of the Decree-Law defined the scope of its application, specifying that it applies 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 creating cities or residential areas and their economic development, as amended by Decree-Law No. (89) of 2025, or for building 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.

Article Three of the aforementioned Decree-Law stipulated the conditions for the beneficiary’s eligibility for subsidized housing finance, consisting of meeting the general conditions stipulated in the mortgage loans regulations issued by the Kuwait Credit Bank for the purposes of purchase or construction, and not having previously received housing care from the State, whether they were allocated a government plot by the Public Authority for Housing Welfare and issued a title deed, or had obtained any of the loans granted by the (Kuwait Credit Bank), regardless of its value or purpose.

Article Four of the Decree-Law outlined the special provisions regarding housing finance, whether subsidized or non-subsidized, and its repayment mechanism, allowing for their combination in accordance with the controls and procedures set 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, in addition to the interest or returns accruing on the non-subsidized finance, in accordance with the terms of the finance contract and the Central Bank of Kuwait’s controls, while noting that the State bears the cost of interest or returns accruing 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 financings shall be repaid in equal monthly installments, with the repayment period not exceeding 25 years from the date of the commencement of disbursing the housing finance with 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 purchasing a residential unit from a real estate developer to the provisions of Law No. 118 of 2023 concerning the establishment of companies for creating cities or residential areas and their economic development. 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, in accordance with the rules established by the Bank.

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Article Seven of the Decree-Law stipulates that financing-granting entities must notify beneficiaries if they fail to repay the housing finance provided to them, in accordance with the terms of the housing finance contract. In such cases, these entities are permitted either to reschedule the housing finance for a period not exceeding five years, in line with instructions from 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 Eight obligates financing-granting entities to register housing finance cases and submit related documentation to the bank, while referring to the Executive Regulations to determine procedures for housing finance and its rescheduling, early repayment mechanisms, grace periods, default cases and their procedures, and beneficiary notification.

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

Article Ten determines that the Bank, on behalf of the State, is committed to financing-granting entities to repay the remaining balance of subsidized housing finance in the event of a beneficiary’s default.

Article Eleven states that the Bank will obtain the mortgage in exchange for its commitment, on behalf of the State, to financing-granting entities to repay the remaining balance of subsidized housing finance in case of beneficiary default, and that the mortgage on the property shall only be established through an official mortgage contract.

The same article emphasizes that the property must be specifically and accurately identified in the mortgage contract; otherwise, the mortgage is void. The registration of the mortgage securing the housing finance shall not be removed throughout the contract period until the debt is fully settled.

It further 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, except after obtaining prior approval from the Bank and the housing finance-granting entity. The transferee must be eligible for housing care and must not have previously received housing finance, and the transferee must accept to assume the obligations arising from the housing finance contract in place of the beneficiary.

The same article refers to the Executive Regulations to determine the mechanisms and procedures for registering, managing, and disposing of the mortgage.

Article Twelve of the Decree 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 and document it, sell it to investors, and repurchase it, as one of the investment tools that enhance the economic environment, in accordance with the procedures stipulated 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 the rules and regulations governing the granting of housing finance and to determine the interest or return rates applicable to non-subsidized 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 stipulates that the provisions of the present draft decree-law shall take effect for beneficiaries from the date of publication of the implementing regulations in the Official Gazette.