The Qatar Central Bank announced the introduction of some amendments to real estate financing controls, to include setting ceilings for granting real estate financing (the percentage of the loan for the real estate guarantee and its duration) within the State of Qatar, which will be applied to Qatari banks and subsidiaries inside the country, while branches and subsidiaries outside the State of Qatar will be subject to the instructions and ceilings of the authorities. The supervisory host as long as the guarantor and financed real estate is outside the country.
These amendments come within the framework of the Qatar Central Bank’s continuous endeavor to develop instructions related to real estate financing controls in line with the requirements of the current stage in the development of the sector, without prejudice to the necessary precaution for real estate risks.
The ceilings for granting real estate financing are divided into 3 categories. The first category is the financing of ready and under construction real estate for individuals for private housing purposes, whose repayment sources are linked to the client’s own sources, whether in the form of salary or any other non-real estate sources, and are as follows:
In the event that the value of the security property is up to 6 million Qatari riyals for citizens, the maximum percentage of the loan for the guarantee is 80%, with a maximum period of 30 years. But if the value is more than 6 million Qatari riyals, the maximum percentage of the loan for guarantee is 75%, with a maximum period of 30 years.
The Qatar Central Bank indicated that for residents, if the value of the guarantor property is up to 6 million Qatari riyals, the maximum loan percentage for the guarantee is 75%, with a maximum period of 25 years. In the event that the value is more than 6 million Qatari riyals, the maximum percentage of the loan for guarantee is 70%, with a maximum period of 25 years.
As for the second category, it relates to the financing of ready-made real estate for individuals and companies for investment and commercial purposes that depend mainly on real estate revenues, as follows:
In the event that the value is up to 10 million Qatari riyals for citizens and national companies, in which the ownership percentage of Qatari partners is not less than 51%, then the maximum percentage of the loan for guarantee is 75% with a maximum period of 25 years, and if the value exceeds 10 million Qatari riyals, then the The maximum percentage of the loan for the guarantee is 70% with a maximum period of 25 years.
With regard to residents, whether individuals or companies, the Qatar Central Bank stated that the maximum loan-to-guarantee ratio is 70% for the value of the guarantor property, which amounts to 10 million Qatari riyals, with a maximum period of 25 years, and if the value exceeds 10 million Qatari riyals, the maximum percentage The loan for guarantee equals 65% with a maximum period of 25 years.
With regard to non-residents, if the value of the security property is up to 10 million Qatari riyals, the maximum loan-to-guarantee ratio is 60%, with a maximum period of 20 years, and if the value of the security property exceeds 10 million Qatari riyals, the maximum loan-to-guarantee ratio is at 60% with a maximum period of 15 years.
As for the third category, it pertains to financing real estate under construction for investment and commercial purposes that depend on real estate revenues, in whole or in part, as follows:
For citizens and national companies in which the ownership percentage of Qatari partners is not less than 51%, the maximum percentage of the loan for guarantee is 60% with a maximum period of 20 years, and for residents and non-residents, individuals and companies, the maximum percentage of the loan for guarantee is 50% with a maximum period of 15 years. year.
The Qatar Central Bank has set a set of basic controls and requirements when financing ready and under construction real estate for individuals for all purposes, and one of the sources of payment is the customer’s salary, so that the total deductions from the salary and social allowances for all types of obligations on the customer’s salary with the banking system do not exceed 75% of the basic salary and the allowance. Social services for Qataris and 50% of the total salary for non-Qataris, inviting banks to conduct the due study to determine the appropriate age for each category of customers according to the entity, their working conditions, jobs, and retirement age, linking that to the size and duration of financing and the need for a personal sponsor or insurance coverage, in addition to verifying the existence of Repayment sources transferred to the bank to cover financing installments for financing ready-made real estate for non-residents.
The Qatar Central Bank noted that in the event that the customer obtains permanent residence in Qatar as a result of owning the property, the bank can extend the financing period so that the period is similar to the period available to residents. The amendments also stipulated that in the case of under-construction real estate financing, the grace period, if granted, should not exceed 3 years and be within the total financing period, with regular interest payments during this period on a monthly or quarterly basis at most.
