Real Estate Development Fund

The Real Estate Development Fund, known as the 'REDF', is one of the development funds in the Kingdom of Saudi Arabia. It specializes in supporting and empowering Saudis to own suitable housing. It is considered one of the largest real estate financing entities in the world.

The headquarters of the Real Estate Development Fund is located in the capital, Riyadh. It has about thirty-five branches in various regions of the Kingdom, covering more than 4,700 cities, governorates, and centers, and it provides its services electronically through the fund's portal.

The Real Estate Development Fund was established by a Royal Decree during the reign of King Faisal Bin Abdulaziz Al Saud in 1974, with an expandable capital of about SAR250 million, to finance companies, institutions, and individuals. Later, it became specialized in providing its services to individuals only. On January 5, 2021, the Council of Ministers issued a decision approving the new Law of Real Estate Development Fund.

The fund has a legal personality, and financial and administrative independence, and is organizationally linked to the National Development Fund. It has a board of directors chaired by the Minister of Municipal and Rural Affairs and Housing, and an executive president appointed by a decision of the Board of Directors.

The fund's capital amounted to about SAR191 billion at the end of the fiscal year 2020-2021. It provides a diverse range of financing and housing solutions in partnership with participating financial institutions in the Housing Program, one of the initiatives of Saudi Vision 2030. These institutions hail from both the public and private sectors, encompassing approximately thirteen local banks, Gulf banks, and local financing companies. This aims to enhance the quality and efficiency of services.

The programs of the Real Estate Development Fund include:

- Housing Support Programs: They include the support product provided, support based on the support matrix, which enables the beneficiary to own a home, the self-construction product by providing support for construction financing loans for the lands owned by the beneficiaries, and the product of housing units under construction through updated support in partnership with the Ministry of Municipal and Rural Affairs and Housing represented in the 'Sakani' program and the National Housing Company.

Monthly Housing Support: The fund provides monthly support to the beneficiaries of the housing support programs, having provided about SAR55.9 billion to about 780,000 citizens during the period from June 2017 to December 2023.

- Real Estate Development Support Programs 'Tatweer': They support establishments operating in the real estate development activity to develop and expand their activities, encouraging financial institutions in cooperation with the sectors, especially small and medium enterprises, by setting the real estate developer's credit rating to qualify for financing and supporting the developer to achieve integration and increase the real estate exhibition at competitive prices and high-quality construction.

- Financiers Financing Program: It aims at enhancing the role of real estate financiers to provide financing and housing opportunities and facilitate the housing journey for the beneficiaries.

The Real Estate Development Fund products include three categories, which are:

- Self-construction product: Financing provided to those who have land and want to build a house according to their preference, through real estate financing in installments through the financing entities participating in the housing support program, with incentive features such as obtaining monthly support according to the income matrix, or support for the down payment, which is immediate non-refundable support up to SAR150,000 for a period of up to thirty-six months, and obtaining a reduced installment during the construction period with some financing entities.

- Ready housing unit product: Financing the purchase of a ready-made property from the market, whether it is a villa, apartment, townhouse, or one of the projects on the ready lands of the Ministry of Municipal and Rural Affairs and Housing, through financing entities participating in the housing support program, with incentive features, including obtaining monthly support according to the income matrix or support for the down payment, which is an immediate non-refundable support up to SAR150,000, and the possibility of benefiting from the support programs for the Real Estate Financing Guarantees Program, the facilitated mortgage, and the in-kind support.

- Under-construction unit product: Financing the purchase of a property under construction or what is called (off-plan), whether it is a villa, apartment, or townhouse, through one of the projects on the lands of the Ministry of Municipal and Rural Affairs and Housing and implemented by accredited contractors, through financing entities participating in the housing support program, with incentive features including obtaining monthly support according to the income matrix, or support for the down payment, which is immediate non-refundable support up to SAR150,000, in addition to in-kind support to reduce the value of the house by deducting the value of the land from the value of the housing unit and obtaining a reduced installment during the construction period with some financing entities, and the possibility of benefiting from the support programs for the Real Estate Financing Guarantees Program, the Facilitated Mortgage, and the in-kind support.

The enablers of the Real Estate Development Fund contribute to enhancing the utilization of the diverse services, including the Real Estate Advisor platform, which is an electronic service provided by the Real Estate Development Fund to facilitate the journey of owning the first home. This allows the beneficiary to design the housing support himself in line with his desires and needs by providing him with the benefits, financing, and housing solutions for each product, in addition to the technical and real estate valuation service aimed at improving the quality of housing projects and governing the financing products of the Real Estate Fund to ensure that the ready-made housing unit product meets the technical and engineering standards. This is in addition to monitoring the construction stages and verifying the readiness and completion of housing for the self-construction product.