Regulatory Alerts2016-11-27
Added · Updated
Circular letter dated November 27, 2016 regarding the unified conditions for granting real estate financing to low-income people under the umbrella of the Real Estate Finance Initiative
The Central Bank of Egypt mandates unified conditions for banks granting real estate financing to low-income individuals under the Real Estate Finance Initiative, requiring full compliance with the attached terms for new financing. The regulations specify eligibility for all professions, including pensioners and the self-employed, set maximum loan-to-value ratios at 85%, and establish a maximum repayment period of 25 years. Banks are prohibited from requiring government guarantees and must cover the cost of group life and disability insurance for applicants. Income verification is standardized using pension amounts plus a 10-50% add-on, and the financing return rate is capped at 5% or 7% of the verified net income.