Regulatory Alerts2025-03-09
Allowing the Saudi Real Estate Refinance Company to Purchase Residential Mortgage Portfolios from Real Estate Financiers after a Minimum of One Month from the Date of Granting the Financing Related to those Assets
Saudi Central Bank (SAMA) has issued a circular amending its previous directive to reduce the minimum holding period for the Saudi Real Estate Refinance Company (SREFC) when purchasing residential mortgage portfolios from real estate financiers from three months to one month, or one month after receiving the first installment from the beneficiary, whichever is later. The updated regulation maintains a six-month recourse period against financiers and applies to all banks, operating subsidiaries, and financing companies across the Kingdom effective immediately. This adjustment streamlines portfolio acquisitions while preserving regulatory oversight over asset-backed financing transactions.
Saudi Central Bank (SAMA)
Reference Number: 106889515
Date: 1446/09/09
Attachments: None
Circular
Respected Sirs, Peace be upon you, God's mercy and blessings.
Subject: Allowing the Saudi Real Estate Refinance Company to purchase residential mortgage portfolios from real estate financiers after a period of no less than one month from the date of granting financing related to those assets, with recourse against the financier for a period of six months from the date of granting financing.
In continuation of Saudi Central Bank Circular No. (611/08/99) dated 13/10/1440H,
which allows the Saudi Real Estate Refinance Company to purchase residential mortgage portfolios from real estate financiers after a period of no less than three months from the date of granting financing related to those assets or three months from the date of receiving the first installment from the beneficiary, whichever is later, with recourse against the financier for a period of six months from the date of granting financing.
The Saudi Central Bank wishes to inform that, based on its supervisory and regulatory role over financing entities; it has been decided to allow the Saudi Real Estate Refinance Company to purchase residential mortgage portfolios from real estate financiers after a period of no less than one month from the date of granting financing related to those assets, or one month from the date of receiving the first installment from the beneficiary, whichever is later, with recourse against the financier for a period of six months from the date of granting financing.
For your information and compliance effective as of its date.
Al-Eissa
Yours sincerely,
Yousef bin Ahmed Al-Sheikh
Deputy Governor for Supervision
Distribution Scope:
- Banks and operating subsidiaries in the Kingdom.
- Financing companies operating in the Kingdom.
- The Saudi Real Estate Refinance Company.
P.O Box 2992 Riyadh 11169, Kingdom of Saudi Arabia Tel: +966 11 463 3000
P.O. Box: 2992 Riyadh 11169 Kingdom of Saudi Arabia Phone: +966 11 463 3000