Saudi Arabia plans to convert a state-owned housing fund into a bank, the latest in a string of reforms to the economic policy apparatus announced since King Salman took the throne in January, as it struggles to address a shortage of affordable housing. After its conversion the Real Estate Development Fund will offer financing in cooperation with the private sector, the fund said in a statement on Sunday. The Al Riyadh newspaper quoted fund director Yusuf Zughaibi as saying it would offer housing loans to eligible people.
Previously, the fund had offered interest-free loans for new residential construction; Zughaibi's comments suggested it would expand its lending volumes while widening the range of its operations to include mortgages for existing homes. The fund has 40 branches across the kingdom and a size of 183 billion riyals ($49 billion), according to its website. A lack of affordable homes has been a complaint of many Saudis, especially for young people active on social media.
