Circular dated October 4, 2021 regarding amending the real estate financing initiative for middle-income people at a return rate of 8%

Cairo, October 4, 2021

Dear Mr. Chairman,

Greetings,

With reference to the real estate financing initiative issued on December 19, 2019, and its subsequent amendments, under which an amount of 50 billion Egyptian pounds was allocated through banks to be directed to the middle-income category (maximum monthly income of 40,000 Egyptian pounds per individual and 50,000 Egyptian pounds per family), at a return rate of 8% (calculated on a declining basis), and with the aim of reaching the largest possible number of citizens, expanding the scope of benefit from the initiative, removing obstacles, and adding more flexibility in implementation, the Board of Directors of the Central Bank has decided the following:

Amending the conditions of the real estate financing initiative issued on December 19, 2019, under which an amount of 50 billion Egyptian pounds was allocated through banks to be directed to the middle-income category, as follows:

1. Increasing the maximum price per unit to 2.5 million Egyptian pounds (instead of 2.25 million Egyptian pounds).

2. Eliminating the condition regarding the maximum net area of the unit, which was 150 square meters.

3. Increasing the maximum financing term to 25 years (instead of 20 years), with the possibility of applying this to current customers benefiting from the initiative.

4. Modifying the attachment regarding the prescribed ratios for calculating the value of compensation in the difference in return rate in case of selling the unit or early repayment, as shown in the attachment.

5. Modifying what was stated regarding the fulfillment of all conditions, guarantees, and documents that enable completing mortgage procedures before allowing the use of financing, specifically what was stated in item (c)-5, to become as follows:

Obtaining any of the guarantees stipulated in Article (2) of the Executive Regulations of the Real Estate Financing Law issued by Law No. 148 of 2001, including the following:

• Considering the decision of the Minister of Housing and Urban Development No. 100 of 2014: First-degree mortgage or registration of the guarantee with deposit.
• Considering the decision of the Minister of Housing and Urban Development No. 146 of 2021: Temporary assignment of allocation for the duration of the financing.
• In all cases, the financier may accept whatever other guarantees they deem appropriate, observing the controls set by the Financial Regulatory Authority.

This is while the remaining conditions of the initiative remain in effect for what has not been addressed herein.

In light of the above, please be kind enough to alert regarding compliance with the above from its date.

Accept our highest regards,

Tarek Amer

Attachment: Calculation of Support Repayment

Repayment Year	1	2	3	4	5	6	7	8	9	10	11	12	13	14	15	16	17-25
1	100%
2	100%	100%
3	100%	100%	100%
4	100%	100%	100%	100%
5	100%	100%	100%	100%	100%
6	100%	100%	100%	100%	100%	100%
7	100%	100%	100%	100%	100%	100%	100%
8	90%	100%	100%	100%	100%	100%	100%	100%
9	80%	90%	100%	100%	100%	100%	100%	100%	100%
10	70%	80%	90%	100%	100%	100%	100%	100%	100%	100%
11	60%	70%	80%	90%	100%	100%	100%	100%	100%	100%	100%
12	50%	60%	70%	80%	90%	100%	100%	100%	100%	100%	100%	100%
13	40%	50%	60%	70%	80%	90%	100%	100%	100%	100%	100%	100%	100%
14	30%	40%	50%	60%	70%	80%	90%	100%	100%	100%	100%	100%	100%	100%
15	20%	30%	40%	50%	60%	70%	80%	90%	100%	100%	100%	100%	100%	100%	100%
16	10%	20%	30%	40%	50%	60%	70%	80%	90%	100%	100%	100%	100%	100%	100%	100%
17-25	0%	10%	20%	30%	40%	50%	60%	70%	80%	90%	100%	100%	100%	100%	100%	100%	100%