Regulatory Alerts2026-05-21
Added · Updated
Limitation of the Right of Recourse against Real Estate Finance Entities in Real Estate Portfolios Sold to the Saudi Real Estate Refinance Company, and Exemption of such Portfolios from the Requirement to Obtain SAMA's No-Objection
The Saudi Central Bank (SAMA) has issued a circular to reduce the right of recourse against real estate financiers and exempt certain real estate portfolios from SAMA's no-objection requirement when sold to the Saudi Real Estate Refinance Company (SRC). Specifically, the period for recourse against financiers for residential real estate finance portfolios sold to SRC is now limited to one month from the financing date, a reduction from the previous six months. Furthermore, these portfolios are no longer subject to SAMA's prior approval, though financiers must still notify SAMA of disposal details within five working days of the final sale contract.
Saudi Central Bank
Number: 472057596 Date: 1447/12/04 Attachments: None
Circular
Dear Sirs/Madams, Peace, mercy, and blessings of Allah be upon you,
Subject: Reduction of the Right of Recourse against the Real Estate Financier in Real Estate Portfolios Sold to the Saudi Real Estate Refinance Company, and Exemption of Real Estate Portfolios Sold to the Company from the Requirement to Obtain the Saudi Central Bank's No-Objection.
Based on the powers vested in the Saudi Central Bank by virtue of its Law issued by Royal Decree No. (M/36) dated 1442/4/11H, and related regulations, and with reference to Saudi Central Bank Circular No. (10689010) dated 1446/9/9H regarding allowing the Saudi Real Estate Refinance Company to purchase residential real estate finance portfolios from real estate financiers after no less than one month from the date of granting the financing related to those assets, with a right of recourse against the financier for six months from the date of granting the financing. We also refer to Paragraph No. (8) of Chapter (Four) of the Rules for Regulating the Disposal of Financing Assets or Rights Arising Therefrom, communicated by Saudi Central Bank Circular No. (6008/99) dated 1440/10/09H, which stipulated that: "The financing entity wishing to dispose of financing assets or rights arising therefrom must submit a request for the Saudi Central Bank's no-objection... etc."
We inform you that the following has been decided: First: Allowing the Saudi Real Estate Refinance Company to purchase residential real estate finance portfolios from real estate financiers after no less than one month from the date of granting the financing related to those assets, or one month from the date of receiving the first installment from the beneficiary, whichever is later, with a right of recourse against the financier for one month from the date of granting the financing. Second: Exempting portfolios sold to the Saudi Real Estate Refinance Company from the requirement to obtain the Saudi Central Bank's no-objection, without prejudice to the real estate financiers' commitment to all statutory periods contained in the relevant instructions for the disposed contracts, and notifying the Saudi Central Bank of the details of the disposal operation within (five) working days from the date of concluding the final sale contract.
For your information and compliance herewith from its date.
And accept my greetings,
(Signature) Yazid bin Ahmed Al-Sheikh Deputy Governor for Supervision
Distribution Scope:
- Banks and operating banks in the Kingdom
- Financing companies operating in the Kingdom
- Saudi Real Estate Refinance Company