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DUBAI - The Saudi Real Estate Refinance Co (SRC), the Saudi equivalent of U.S. mortgage finance business Fannie Mae, said on Monday that it has extended to 30 years the maturity on its benchmark for mortgages in the kingdom.
The long-term fixed rate (LTFR) benchmark previously had a maximum eligible tenor of 25 years.
"SRC will further support the development of a robust mortgage market in the Kingdom, providing longer term liquidity to primary originators," the firm, fully owned by the powerful Saudi sovereign wealth fund, the Public Investment Fund, said in a statement.
"It will allow lenders in the Kingdom more flexibility and the ability to offer more sustainable mortgage solutions to borrowers."
The increased tenor will allow mortgage originators "to accelerate the delivery of affordable home financing thereby increasing homeownership among Saudi citizens, aligning with the objectives of Vision 2030's homeownership program," Fabrice Susini, SRC's chief executive, said in the statement.
Vision 2030, the ambitious economic agenda spearheaded by Saudi Crown Prince Mohammed bin Salman to wean the economy off oil, aims for 70% of Saudi families to own homes by 2030. Susini told Reuters in March that roughly 62% of Saudis owned homes.
(Reporting by Yousef Saba, Editing by Louise Heavens)