The Central Bank of Egypt (CBE) has put in place new policies and measures on the bank’s mortgage finance initiative and its subsequent amendments, limiting it to financing low-income citizens only, Invest-Gate reports.

The initiative’s new measures include offering mortgage finance to those who meet the CBE conditions via the banks’ resources at interest rates of 5-7% for the low-income segments for a maximum period of 20 years without providing treasury bills as a guarantee, according to an official statement on February 21.

According to the statement, interest rates applied on mortgage financing shall not be amended following its provision and during the entire loan’s term.

In addition, all banks will be compensated for the price difference of interests based on the main operation’s price at the CBE. However, the central bank added a condition that it must be informed about the value of compensation within the first week of each month starting from the month that follows the loan’s provision.

The CBE stressed on the significance of banks taking the necessary measures for the provision of mortgage financing to any low-income citizen in the light of their credit policies. It also urged banks to receive applications from those individuals via the Social Housing Fund for this initiative will be applied on all units available through the fund only.

The new amendments also stipulate the conditions for clients benefiting from the initiative, including the necessity of holding the Egyptian nationality and the eligibility to benefit from the initiative only once, regardless of any mortgages that have been or will be obtained outside the framework of the initiative.

Launched in 2014 with an initial EGP 10 bn disbursement, the CBE initiative is aimed at tackling the country’s affordable housing shortage. Following the first phase, the bank has brought the initiative’s total financing to EGP 20 bn, after bringing in an additional EGP 10 bn.