Friday 23 July 2021
The new presidential initiative controls for real estate financing with an annual interest rate of 3% decreasing made it possible for a package of benefits for citizens of the middle and low-income brackets that were not applied before in the previous initiatives.
The Central Bank relied on the definition of the low-income segment benefiting from the initiative as those whose monthly salary does not exceed 4,000 pounds for the single, or 6,000 pounds for the married, while the middle-income are those whose monthly income does not exceed 10,000 pounds for the single, and 14,000 pounds for the married.
Banks, especially Al-Ahly, Egypt, Cairo, and Al-Zari, intend to immediately start implementing the new real estate financing initiative after the Eid Al-Adha holiday, given that these banks have previous experience in previous initiatives.
Masrawy presents the 10 most important advantages that are unique to the new presidential initiative for real estate financing, as soon as it is implemented in banks:
1 – 3% annual interest decreases, which is the first at the level of the banking system, compared to 5%, the lowest interest in a previous initiative.
2 – Middle-income earners enjoy the same interest rates applied to low-income people without discrimination compared to previous initiatives that increase the interest rate on the average by 1% above the rate of the low-income earners.
3 – Pensioners up to the age of 75 benefit from the initiative, which is the first of its kind, as banks are reluctant to fund pensioners in the initiatives due to the high risk of non-payment.
4 – Abolition of the requirement to restrict space on middle-income housing units in the presidential initiative to open the way for the provision of many units in the market, compared to the limitation of space to a maximum of 150 meters in previous initiatives.
5 – The presence of marginal administrative expenses between 0.5% on low-income and 1% on middle-income, attracting many real estate finance companies to participate in them because of covering administrative expenses.
6- The Central Bank provides a financing tranche of EGP 100 billion, which is the highest allocated segment in the history of real estate financing initiatives, compared to EGP 20 billion in the previous initiative for low-income people, or EGP 50 billion in the previous real estate finance initiative for middle-income people.
7 – Flexibility in providing financing for unregistered housing units provided that they are capable of real estate registration, that is, they do not have any violations, while allowing banks to obtain a guarantee, whether (a financial deposit or in-kind property) in return for not registering, but this procedure is left according to the decision and policy of each bank.
8 – Excluding the families of martyrs from the Interior Ministry and the army from the maximum wage for the first time in an initiative
9 – Immediate implementation of the initiative in banks, as there are specialized departments in banks for real estate financing and an automatic linkage system with the central bank that speeds up the financing procedures.
10 – There are two prices for housing units in front of middle-income people, ranging from 350 thousand pounds to 1.1 million pounds as a maximum, or from 1.1 million pounds to 1.4 million pounds as a maximum, without setting a maximum monthly income for the customer against the price of each unit or increasing the interest rate from one price to another. Another, as happened in previous initiatives, but the difference between the two prices was limited to the percentage of the financing paid by the customer from the total price of the housing unit.
The initiative stipulated that the customer pay 15% as a minimum advance of the total housing unit price of 1.1 million pounds as a maximum, or the customer pays 20% as a minimum of the total value of the housing unit whose price is above 1.1 million pounds and up to 1.4 million pounds as a maximum.