Article 4 of the Saudi Law of Real Estate Development Fund
المادة 4 من نظام صندوق التنمية العقارية
The Article allows the Fund, by Board decision, to provide loans directly to beneficiaries, with the Board setting the necessary mechanism and controls.
Official text (Arabic)
This article has not been amended since the law was issued.
يجوز للصندوق -بقرار من المجلس- تقديم القروض مباشرةً للمستفيدين. ويضع المجلس الآلية والضوابط اللازمة لذلك.
This is the official Arabic wording, the only legally binding version. We do not translate the law itself; the explanation below is ours. Official source: Bureau of Experts at the Council of Ministers
Article 4 explained in plain English
The principle in the Law is that the Fund supports the beneficiary through financing entities, by means of the subsidized real estate loan that Article 1 defines. This Article opens another path, which is a direct loan from the Fund to the beneficiary.
The text contains two points:
- Permissibility by Board decision: a direct loan is permitted, not mandatory, and must be by decision of the board of directors.
- The mechanism and controls: set by the Board, and the text does not state their content, such as amounts, periods, or eligibility conditions.
The beneficiary, as Article 1 defines him, is someone who has a loan application with the Fund or the Ministry and whose application has been approved, or any other loan application lists approved by the board of directors.
This Article is connected to paragraph 2 of Article 3, which requires the Fund to take the necessary guarantees for the direct financing it provides, and guarantees according to Article 1 include the mortgages the Fund accepts.
Anyone who wishes to know whether a direct loan is available to him must refer to the controls the Board sets.
To assess a particular situation with the Fund, it is advisable to consult a lawyer specializing in real estate and real estate finance matters.
Practical example
Saad is a beneficiary in Hail who could not obtain financing from a bank. If the Fund's Board decides to provide direct loans, Saad may obtain a direct loan under the mechanism and controls the Board sets, and the Fund takes the necessary guarantees for this financing.
Translated from our Arabic explanation with machine assistance. For guidance only; it does not replace advice from a lawyer on your situation.
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Frequently asked questions about Article 4 of the Saudi Law of Real Estate Development Fund
Does the Real Estate Development Fund provide direct loans?
It may, by decision of the Board, and the Board sets the necessary mechanism and controls.
Who sets the conditions of the direct loan?
The Fund's board of directors, which sets the mechanism and controls according to the text of the Article.
Does the Fund require guarantees for the direct loan?
Yes. Paragraph 2 of Article 3 requires the Fund to take the necessary guarantees for the direct financing it provides.
More articles on Subsidized Real Estate Loan and Beneficiary Financing
- Article 1
The Article defines the terms in the Real Estate Development Fund Law, including beneficiary, financing entities, subsidized real estate loan, financing, and guarantees.
لأغراض تطبيق هذا النظام، يقصد بالألفاظ والعبارات الآتية -أينما وردت في هذا النظام-المعاني المبينة أمامها، ما لم يقتض السياق غير ذلك: النظام: نظام صندوق التنمية
- Article 3
The Article sets the Fund's aim of enabling beneficiaries to own suitable housing, and lists its powers, from subsidizing loan profits to lending, investing, guarantees, and borrowing.
1- يهدف الصنـدوق إلى تحقيق التنمية العقارية في المملكة من خلال تمكين المستفيد من تملك المسكن الملائم، وللصندوق في سبيل ذلك ما يأتي: أ- دفع أرباح القرض العقاري ا
- Article 6
The Article makes the Board the authority responsible for setting the Fund's general policy and lists its competences, including approving products, setting the support percentage, regulations, and the budget.
دون إخلال باختصاصات صندوق التنمية الوطني، المجلس هو السلطة المسؤولة عن رسم سياسة الصندوق العامة، في حدود نظامه والأنظمة ذات العلاقة، ويتولى جميع المهمات والصلاح
- Article 14
The article gives the Fund's money, including the financing it provides, the benefits and guarantees established for the public treasury's rights, and provides that it is collected under the laws regulating this.
تتمتع أموال الصندوق، بما فيها التمويلات التي يقدمها، بالمزايا والضمانات المقررة لحقوق الخزانة العامة، وتُحصّل وفقاً للأنظمة المنظمة لذلك.
The texts are reproduced from the official website of the Bureau of Experts at the Council of Ministers for reference; where they differ, the officially published Arabic text prevails. This content is not legal advice.