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Decree-Law No. 114 of 2026 on mortgage financing for housing care beneficiaries in Kuwait was issued yesterday with the aim of accelerating the provision of housing for citizens and removing financial obstacles that prevent them from accessing housing care, in order to ensure the sustainability of providing adequate housing in the foreseeable future, according to the Kuwait News Agency (KUNA).
The decree-law includes 15 articles, and determines the scope of application of the mortgage financing system, whether to buy a housing unit from the real estate developer in accordance with Law No. 118 of 2023 and its amendments, or to build the government voucher allocated to the citizen from the Public Authority for Housing Welfare, in accordance with the approved controls for housing projects. The decree specified the conditions for the maturity of subsidized mortgage financing, including meeting the general conditions stipulated in the list of mortgage loans issued by the Kuwait Credit Bank for the purposes of purchase or construction, and the beneficiary has not previously received housing care from the state.
This also includes those who have already been allocated a government voucher, for which a document of ownership has been issued, or obtained one of the loans granted by the Credit Bank of Kuwait, regardless of the value of the loan or its purpose. The decree allows the combination of subsidized and unsubsidized mortgage financing in accordance with the controls and procedures set by the Central Bank of Kuwait, with the beneficiary bearing the origin, interest or returns of the financing for unsubsidized financing, while the State bears the cost of interest or revenues from the subsidized financing.
The decree defines the scope of application of the mortgage financing system to buy a residential unit from the real estate developer in accordance with Law No. 118 of 2023 and its amendments
It is noteworthy that the decree provided for the payment of real estate financing through equal monthly installments, provided that the repayment period does not exceed 25 years from the date of the start of disbursement of financing; in accordance with the instructions and controls of the Central Bank of Kuwait, and the financing allocated for the construction of the government voucher is disbursed in stages; in accordance with the rules adopted by the bank, while the procedures for financing the purchase of housing units from developers are subject to the provisions of the law regulating the establishment and economic development of cities and residential areas.
In the event that the beneficiary defaults, the donors shall be obliged to warn him, and they may reschedule the financing for a period not exceeding 5 years in accordance with the controls of the Central Bank, provided that the beneficiary bears the benefits or returns resulting from the period of rescheduling, or taking legal action against him, and the decree at the Credit Bank of Kuwait assigned the task of the State Prosecution in signing contracts with the donors of financing, while the Ministry of Finance is committed to pay the interest or returns for the subsidized financing of the Bank from the General Reserve Account; in accordance with the conditions and procedures determined by the executive regulations.
On the other hand, the Credit Bank is obliged, on behalf of the State, to pay the remaining balance of the subsidized financing to the donor in the event that the beneficiary defaults on the payment, in exchange for obtaining an official mortgage on the property, and the mortgage remains in place until the payment of the debt in full, and the beneficiary may not dispose of the mortgaged property by sale, donation or other, or arrange any right in kind to it, except after obtaining prior approval from the bank and the donor, and in accordance with the conditions specified in the decree and the executive regulations.
The decree provided for the payment of real estate financing in monthly installments, provided that the repayment period does not exceed 25 years from the date of the start of the disbursement of the financing
The decree also allowed the Kuwait Credit Bank, or any party determined by the competent minister, to buy all or part of the real estate financing provided to the beneficiaries, and to securitize and sell it to investors and buy it back, as one of the investment tools, in accordance with the controls of the Central Bank of Kuwait and the Capital Markets Authority, and the decree obliges the Central Bank of Kuwait to issue rules and controls for the granting of mortgage financing, including determining the rate of interest or returns on unsubsidized financing.
It is noteworthy that the executive regulations of the decree-law are to be issued within 6 months from the date of its publication in the Official Gazette, provided that the provisions of the law shall enter into force for the beneficiaries from the date of publication of the executive regulations in the Official Gazette.
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