Some 38 years following its founding, the Real Estate Development Fund (REDF) has provided financial assistance for the construction of about a million home in the Kingdom.
“The REDF made 811,864 loans worth SR 263.78 billion to construct 974,237 housing units since its was established in 1975,” according to a statement released by the REDF yesterday.
The Riyadh-based fund with its 29 branches across the Kingdom primarily aims to build houses and residential complexes across the country.
The fund's initial capital of SR 250 million jumped to SR 183 billion in 2011, making it one of the largest financing agencies in the world that seeks to help citizens acquire high-quality homes, according to the statement as quoted by the Saudi Press Agency.
The REDF extends long-term, interest-free loans, with a repayment time of 25 years. It also offers interest-free loans to Saudi investors to construct multipurpose building complexes that include housing, office facilities and exhibition halls. The loans to investors were sufficient to cover 50 percent of the total cost of the construction with a ceiling of SR 10 million.
In its first five years, the REDF fulfilled its major objective by solving the housing crisis of the time caused by the Kingdom's extraordinary pace of development.
In 2011, a royal order was issued to lift the loan limit from SR 300,000 to SR 500,000 and simplify the formalities related to taking a loan. After that order, the waiting period for loans was done away with. An eligible loan applicant can receive the loan at the time of his choice without any time limit. The entire loan amount for a completed building could be paid in three months after the completion.
The REDF would also receive the required documents from a selected loan applicant by post as opposed to the previous requirement of the applicant showing up in-person.
In line with the government’s instructions, the REDF strives to disburse loans to people in all parts of the Kingdom and that is why people in 4,343 cities, towns and villages have received its assistance.
In March 1989, the Council of Ministers entrusted REDF with the task of distributing the finished housing units constructed by the then Ministry of Public Works and Housing in Riyadh, Dammam Alkhobar, Ahsa, Qatif, Jeddah, Makkah, Madinah and Buraidah. The fund completed the distribution of 56,120 housing units after equipping them with utilities in 2001. It is still supervising those units.
From 1975 to the end of the 1993, the REDF advanced 411,711 personal loans worth SR 107. 97 billion to build 489,404 housing units. The Fund has also advanced 2,470 investment loans with a total value of SR 5,15 billion, which contributed to the construction of 29,227 residential units, 2,857 offices and 5,125 trade exhibitions.
The total loans disbursed by the REDF until the end of 2006 amounted to SR 134.1 billion.