33% of salary to go toward home loan repayment

JEDDAH: Citizens benefiting from the government's housing scheme will have to repay loans in monthly installments of 33 percent of their salaries and within 25 years, Minister of Housing Majid Al-Hogail has said.

“The loan installments will be deducted directly from their monthly salaries, provided the repayment period does not exceed 25 years from the date of the first installment. Also, the applicant’s age should not exceed 65 years at the end of the payment period,” the minister clarified while speaking to a local publication.
Al-Hogail revealed that in case the applicant cannot repay the loan himself, his family members will be included and the deduction will be calculated accordingly. “If they cannot collectively prove their financial ability to repay the loan, they should introduce a guarantor.”
The minister divided the applicants for housing loans into two types: Those who are capable of repaying the installments within the set norms without bringing in a guarantor and those who cannot. Priority will be given to the first category of applicants. The second category of applicants will be allocated housing units at a later stage, he said.
“The ministry will verify the financial ability of applicants before allotting house units,” he said.
The housing minister has approved four important amendments based on the recommendations of the undersecretary for planning. The period for the due date of the installment has thus been reduced to four months from the date of receiving a housing unit instead of one year.
According to the amendments, the due date for repayment for those eligible for residential plots has been reduced to two years instead of three after receiving the plot, and four months after completing the constructions rather than one year.
With regard to repayment of loan, the installment date begins two years after the date of signing of the contract, or four months after the completion of the construction.