Press Release
Riyadh, Saudi Arabia; 1 November 2021: Saudi Real Estate Refinance Company (SRC), wholly owned by the Public Investment Fund (PIF), has announced the signing of a refinancing partnership agreement with the Real Estate Development Fund (REDF) to refinance a real estate portfolio worth SAR 10 billion.
The agreement aims to increase the liquidity in the home financing market in the Kingdom, reduce the cost of home financing for Saudi families and support the objectives of the housing program under Vision 2030 to raise homeownership rates by 70% by the year 2030. The agreement also supports REDF in enhancing its financial stability.
The agreement was signed in the presence of His Excellency Majed Al Hogail, Minister of Municipal and Rural Affairs and Housing and Chairman of the (REDF), and His Excellency Mohammed bin Mazyad Al-Tuwaijri, Deputy Chairman of the National Development Fund (NDF). The agreement was signed by Mansour bin Madi, CEO of REDF and Fabrice Susini, CEO of SRC.
Fabrice Susini, CEO of SRC, wholly owned by the Public Investment Fund (PIF), commented: “The agreement aims to increase the supply of home loans for affordable housing that aligns with our vision to develop a robust secondary home financing market for the benefit of the primary housing market in the Kingdom. Therefore, the agreement with REDF positions us as a catalyst in achieving the housing goals stipulated by Vision 2030. This is our largest agreement worth SAR 10 billion with a home financing originator and with this, we are unlocking opportunities for the growth of home financing market in the Kingdom by creating low-risk tools in partnership with financial institutions.”
Mansour bin Madi, CEO of REDF, stated: “The agreement aligns with our strategy to achieve the objectives of providing various financing and housing options to the citizens in the home financing market. The agreement also fulfils the needs and requirements of families benefiting from Saudi Arabia’s “Sakani” housing program under the Mado’om mortgage program to achieve the objectives of the housing program and raise the percentage of homeownership of families to 70% by 2030.
He added: “The financing partnership with SRC will enable us to achieve our objectives and enhance the sustainability of supporting Saudi families by designing new programs and initiatives that are consistent with the future phase of REDF after adopting its new system. Furthermore, the agreement guarantees the continuation of providing monthly home financing to the beneficiaries of the Mado’om program to enable future generations to live. Through the Mado’om program, we succeeded in providing more than 560,000 home loans from June 2017 until Q3 of 2021.”
SRC, formed in 2017 by PIF to facilitate Vision 2030 homeownership goals, provides liquidity to originators by buying home financing portfolios from local banks and real estate financing companies, as well as aggregating and packaging the portfolios into Shariah compliant mortgage-backed securities for sale to domestic and international investors. SRCs’ expanding frequency of refinancing transactions are reflective of a paradigm shift in real estate financing from ‘originate to hold’ to ‘originate to sell’. This benefits all stakeholders in the housing ecosystem who stand to gain from additional liquidity, risk management, and lowered financing rates for Saudi families.
REDF offers a profit-packed loan of up to 100%, with a value of SAR 500,000, to meet the needs of Sakani beneficiaries. The subsidised home loan takes advantage of the self-construction option and allows citizens to opt for either ready-made or under-construction housing units, in partnership with more than 18 financing entities. REDF also provided more than SAR 31 billion in monthly support to more than 560,000 beneficiaries from June 2017 until Q3 of 2021.