Regulatory Alerts2014-01-01
Instructions No. 1 of 2014 Regarding the Regulation of Housing Loans and Real Estate Financing
The Palestine Monetary Authority issued Instructions No. 1 of 2014 to regulate housing loans and real estate financing by implementing dynamic Loan-to-Value (LTV) ratios and maximum tenor limits strictly calibrated to borrower credit ratings. The directive caps standalone residential loans at $80,000 for up to 12 years without mandatory down payments, while subjecting larger or joint financing to rigorous credit assessments, dual licensed appraisals, and a maximum Debt Burden Ratio of 50%. It further mandates comprehensive life and property insurance, restricts additional housing loans to a 40% LTV threshold, and applies these standardized risk controls exclusively to mortgage transactions valued at $200,000 or less.
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