Today, Sunday, the Central Bank of the Emirates issued a notice addressed to all banks and finance companies operating in the UAE regarding housing loans granted to beneficiaries of housing finance for the Sheikh Zayed Housing Program.
The notice included details of the Central Bank’s decision, in agreement with the Sheikh Zayed Housing Program regarding Article (5) of the mortgage loan system issued in 2013, where the debt burden ratio was raised, which is the percentage bearing the beneficiary or the customer to pay the monthly installments of the total salary and any income from A known and specified source, from a maximum of 50% to 60% of the program's housing finance beneficiaries.
The circular also provided for granting citizens of long-term loans the flexibility to obtain housing loans, after ensuring their ability to pay within the debt burden limit (60%), according to the Emirati newspaper Al Khaleej.
Banks may raise the debt burden ratio for retirees and senior citizens from 30% to 50% so that they can benefit from housing loans, after ensuring their ability to pay within the debt burden limit, and obtaining no objection from them to raise the monthly deduction against the housing loan.
The requirement for the borrower to contribute to the down payment of 15% for housing loan beneficiaries has been canceled, for the amount of the secured loan and paid dividends/interests by the federal government, according to three conditions, as follows:
• The property to be built/purchased must be the citizen's first home and used for his private residence.
• That the citizen pays the value of the difference in the advance payment to cover the 15% required according to the system in case the loan amount exceeds the guaranteed amount and the profits/interests are paid by the federal government, from his own sources and not from other borrowing sources.
• Compliance with the other requirements mentioned in the Mortgage Loans Law and its amendments.
These new instructions come from the Central Bank’s keenness to support the government’s efforts to make its citizens happy, achieve housing stability for citizens, and provide comfort and well-being for its people, in light of the new policy for federal government housing loans, which was recently approved by the Council of Ministers with the aim of providing financing for housing loans through partnership. With the private sector and national banks, in order to support the objectives associated with reducing the waiting period for housing applications.
The mortgage loan system, issued by the Central Bank, aims to set an acceptable minimum standard for mortgage guarantees in order to protect the financial and consumer sector, and enhance financial stability, in addition to seeking to develop and organize the mortgage loan market in the country in a sound manner, and control it with appropriate and developed systems.
