Banks to subsidize
pre-approved housing loans

Mortgages from before March 15 can benefit

The Association of Banks (ABL) said it has asked the banks to bear the subsidy costs of already approved housing loans until the end of 2018. Loans accepted by the banks and submitted to the Central Bank (BDL) before March 15, 2018 will benefit from the banks’ support.

A banking source said that an agreement has been reached between the banks and BDL in this regard. The source said that the value of these loans is estimated at around $300 million.

BDL will take over for the year 2019, and pay the subsidies of these loans, he said.

On March 15 of the current year, BDL issued a circular allowing banks that had approved subsidized housing loans beyond the quotas allocated to them to benefit from BDL interest subsidies. BDL's contribution will be taken from the incentive package that it intends to launch in 2019.

New housing loans, which will be provided by the Public Corporation for Housing (PCH), will be subsidized by the Ministry of Finance (MoF). Last month, Minister of Finance Ali Hassan Khalil said that the MoF will subsidize the interest rates on new housing loans worth up to LL1000 billion ($663 million). Subsidies will be provided on a regular basis each year, he said. The loans will be supplied from the banks’ liquidity, while the MoF will pay the difference in the interest rates from the public budget.

The banks stopped providing new subsidized housing loans earlier this year when all of the subsidies allocated by BDL had been used up.