Off plan Product REDF Down Payment

“It is financing the purchase of a property under construction or also known as (off plan), whether it is (villa, apartment, townhouse) through one of the Ministry of Housing projects, compatible with the provisions of Islamic Sharia and provided to the beneficiaries of REDF and the Ministry of Housing. It is obtained in the form of transferred payments to the project developer, according to the agreed upon completion schedule with the customer at the time of contracting and is paid in monthly installments until the financing is fully paid. The mechanism of subsidy aims to facilitate home ownership for the beneficiary by subsidizing advance payment to fully/partially with a value of 100/150 thousand Saudi riyals.

The product is financed under Tawarruq, where finance is provided to fulfill customer partial or full needs to construct a residence. The finance is received by payments transferred to the project developer according to progress phases schedule agreed upon with the customers at the time of contracting, and it is paid by monthly installments until the amount is fully paid.


Tawarruq home finance concept:

SAB owns metal purchased from the global market and sells them to customers as agreed upon fixed profit rate, soon after purchasing metals from SAB, by issuing an official power of attorney for SAB, the customer can sell metal at the prevailing prices then obtain financing amount, and the land is mortgaged as a guarantee until the full amount is paid.


Characteristics of Tawarruq Form for Home Finance:

  • Fixed installments during financing period
  • Fixed profits during financing period
  • Mortgage the property to the Bank


Required Documents:

  • Salary Introduction Letter (Pay Slip Letter)
  • Salary Transfer Letter
  • Copy of Identification card
  • Full Medical questionnaire if the amount above SAR4,000,000

    Product specifications and features:

    • Approved by Shariah Board as Tawarruq form
    • Facilitating home ownership by providing advance subsidy of either 100/150 thousand riyals.
    • Cover the advance payment of the finance fully/partially
    • Exemption from paying the remainder of financing amount in case of death or permanent disability (God forbid)
    • A financing amount up to SAR 5 million and not less than SAR150,000
    • Financing period can be obtained for up to 25 years
    • Fixed installments and generally accepted profits throughout financing period.
    • 90% of first property value can be financed
    • Step up payments as per customer obligations. Allow customer to obtain 2in1 products.
    • Step down payments on retirement- the customer will have a reduced installment after retirement in accordance with the pension.
    • Combo gives the customer ability to obtain personal and home finance in case the customer approaches retirement age.
    • Finance customers from age 21 until 77.
    • Step down payment for the first two years or the standard off-plan sale product (equal payments) to benefit from the highest possible financing amount.


    Approval conditions:

    • The customer should be qualified for the REDF program, registered in the real estate advisor, and choose the program.
    • Subsidy coverage 100/150 thousand as down payment only.
    • The customer may benefit from the REDF home finance program once.
    • If the advanced payment is above 100/150 thousand riyals, the customer will pay the remaining amount.
    • The customer has to be eligible to receive the financing amount according to the policies, terms and conditions of the home financing.
    • The applicable home finance conditions, standards and documents in SAB are applied to the currently subsidized customers.
    • Administrative fee 1% of the value of the financing or SAR5000, whichever is lower, excluding VAT.
    • Minimum salary starting from 3,000 SAR


    Application approval steps:

    • Obtain personal finance
    • Apply for home finance
    • Valuation of customer's financial capacity
    • Initial approval for financing
    • Real estate evaluation and study of the application
    • Final approval of the financing request