The Central Bank of Egypt (CBE) decided to increase the funds allocated for its mortgage initiative for low and middle-income to EGP 20bn from EGP 10bn.
According to the bank’s statement, this decision comes as a result of the initiative’s success among various segments of society, whether the limited, middle, or above middle-income people, in the last period, so most of the previously allocated funds was used.
In February 2014, the CBE launched a EGP 10bn initiative in which banks receive a discount on the mortgage prices for the next 20 years so that they can later give loans back with deducted annual earnings at 7% for lower-income citizens. There will also be a deducted annual earning at 8% for middle-income citizens, on condition that the banks use the money to buy housing units in the new urban communities.
In June, the CBE decided to raise the maximum monthly income with a 5% interest rate for low-income people to EGP 2,100 instead of EGP 1,400. The maximum monthly income of the middle-income people was also raised to EGP 10,000 instead of EGP 8,000 for single persons, and EGP 14,000 rather than EGP 10,000 for families.
The maximum price of housing units for above middle-income people was increased to EGP 700,000 instead of EGP 500,000, while the required maximum monthly income to obtain a loan from the Mortgage Finance Fund was increased to EGP 3,500 for single persons and EGP 4,750 for families.
The CBE stressed that these amendments came to achieve better results in the coming years and to absorb a larger number of people in the initiative.
According to the CBE, the families of army and police martyrs and the injured who applied for housing units in social housing projects are exempted from applying the maximum income.
The Mortgage Finance Fund has allocated housing units for the families of army and police martyrs and the injured in the social housing project, and exempted them from meeting some of the necessary conditions, such as the maximum income.
The CBE revealed several days ago that the total volume of banks’ financing within its initiative reached about EGP 7.2bn at the end of June 2017, compared to EGP 5bn in December 2016.