The Financial Regulatory Authority (FRA) has signed off on allowing Egypt-based mortgage finance companies to lend up to 15% of their capital base to an individual household, instead of 10% earlier, Invest-Gate reports.

Mortgage finance players will also be able to dole out up to 30% of their capital to households seeking mortgages for non-residential properties, up from a previous 20%, FRA Chairman Mohamed Omran announced in an official statement on September 28.

This is applicable for the investor, their spouse and minor children, or a single legal person and the parties associated with them, Omran elaborated.

The FRA decided to scale back the restrictions on portfolio concentration for mortgage providers after finding out that most families opt for mortgages to purchase larger homes in state-sanctioned social housing projects, with areas of more than 86 square meters, which account for almost 85.7% of property financing in Q2 2020, the statement indicated.

However, smaller mortgage finance players were unable to hand out loans for these purchases without exceeding the original limit, it further added.

Under the executive regulations of the Mortgage Finance Act, mortgage lenders are only allowed to take on debt up to 25-fold their equity base as a risk management precaution, and maintain a capital adequacy ratio of 12% and a level of liquidity of no less than 10% of current liabilities, the chairman noted.

Meanwhile, the FRA also approved in principle the creation of a “real estate guarantee registry” through an amendment to the Mortgage Finance Act. It will be administered by the regulator and will contain information on property transactions, including data on guarantee providers and any write-offs made by financiers, to better safeguard all parties involved, Omran announced.