Saudi Arabia’s Saudi Real Estate Refinance Co. (SRC), an arm of the Public Investment Fund (PIF), will acquire mortgages worth SR3 billion ($800 million) from the Public Pension Agency (PPA), according to reports.
The multimillion-dollar mortgage financing deal signed on Sunday is expected to fuel the drive toward increased Saudi homeownership, a core pillar of the Vision 2030 strategy, according to Arab News.
The SRC is the Saudi equivalent of Fannie Mae and Freddie Mac in the U.S. The recent deal to acquire the mortgages from the PPA is an escalation in activity for the organization.
According to Bloomberg, the SRC, established in late 2017 by the kingdom’s sovereign wealth fund, “aims to deploy around 20 billion riyals before the end of the year, mostly by buying up mortgage portfolios from other lenders.” The latest deal is the largest so far for the company, which had assets of about 2.25 billion riyals at the end of 2019, Bloomberg notes. The refinancing company was established to buy home loans from banks and other finance companies, freeing up the lenders to book more mortgages.
“The agreement provides the mortgage financing industry an opportunity to refinance their assets, that would otherwise be sitting in their books for a decade or two, by offloading mortgage portfolios,” Fabrice Susini, the company’s chief executive officer, said in a statement.
In April, Susini said the SRO expected only a temporary slowdown in the mortgage market over the ensuing months during the Pandemic’s peak in the Kingdom as the new coronavirus hit housing demand.
