RIYADH: The Public Pension Agency (PPA) has launched a SR10 billion scheme to finance housing for people in government service, including retirees. The scheme would cover both civil and military sectors, a high-ranking official speaking on condition of anonymity said recently.
“Over 1,000 applications, out of 6,700 received so far, have been approved to buy houses under the scheme,” the official said, adding that over SR200 million has been distributed as loans to people to build houses.
Beneficiaries of the General Organization for Social Insurance are not included in the PPA scheme, Al-Madinah daily reported yesterday.
An applicant is eligible for a loan between SR150,000 and SR1,000,000 to buy a house — land not inclusive — and it will have to be repaid over a period not exceeding 25 years.
The official added that 50 percent of the pensioners in the Kingdom would not benefit from the scheme because they fail to fulfill an important condition to apply for the loan. The condition is that an applicant should not have an outstanding loan from any bank or other finance establishments while applying.
The amount of a repayment installment has been set at one third of the salary if the beneficiary is an official and one fourth of his pension if he is a retired personnel, the official said.
“The project aims at enhancing its activities while complementing, and not competing with, finance projects undertaken by other agencies. There is room for vast financing in the real estate market,” he said. The PPA has made huge investments in various companies and it finances the project with the help of the returns from them. “The PPA board of directors allocates SR4 billion annually to cover the demands of the housing project,” he said. The PPA also has 10 percent stake in the Alinma Bank. The PPA was established by converting the Retirement Pension Directorate to a financially and administratively independent legal entity in February 2004 and it functions under the chairmanship of the minister of finance.