Explained: Real Estate Bank Loans

Established in 1966 as a public institution, Syria’s Real Estate Bank finances various kinds of loans related to the purchase, renovation, or restoration of real estate.

According to the bank’s financial statements from 2021, published in the Al-Watan newspaper, the Real Estate Bank granted loans related to real estate as follows: 1,661 restoration loans (i.e. for damage repair) worth a total SYP 8.7 billion; 414 renovation loans (i.e. cladding, clay, paint, and electrical and sanitary installation) worth a total SYP 2.6 billion; and 409 purchase loans at a total value of SYP 4.3 billion.

The Real Estate Bank’s website lists the types of loans it currently offers. The bank often changes the names of the categories of loans to suit their financial and legal needs. Sometimes, high-ranking bank officials, in their official statements, confuse the titles of those loans.

The loans differ in the conditions for obtaining them, the payment methods, and the loan ceilings. However, for all of the loans offered by the Real Estate Bank, the real estate property, the subject of the loan must be formally listed within the land registry in a zoned area under regime control. The land record for that property must also be free of any problems related to documentation and subdivision.

As part of the loan process, the bank requests that the borrower provide a real estate registration statement, a copy of the building licence from the relevant municipality, a copy of the subdivision plan from the Directorate of Cadastral Affairs, and a copy of the “general site” map from the municipality. The bank also requires a certified statement of income and a copy of the applicant’s professional or trade certificate.

The applicant must secure a number of guarantors working in the public sector, in accordance with the value of the loan. For example, a SYP 5 million loan does not require a guarantor, while in order to receive an SYP 20 million loan, the applicant must find at least two guarantors. The Real Estate Bank is currently considering eliminating this requirement if the applicant is able to secure a real estate collateral equivalent to 200 percent of the loan’s value.

For purchase loans, the bank grants loans at a ceiling of SYP 50 million to fund the purchase of a real estate property at an interest rate of 10.5 percent to be paid within five years. The ceiling for loans meant for “purchase and completion of a property whose structure is unfinished” is also SYP 50 million, but the interest is 11 percent, to be paid within 10 years. Finally, a real estate construction loan has a SYP 50 million ceiling, though with an 11.5 percent interest rate and repayment timeline of 15 years. In the cases mentioned above, the bank loan covers 60 percent of the value of the residential property, based on an assessment by the bank’s experts. A self-employed or freelance loan applicant must secure three guarantors working in the public sector.

Recent years have seen the Real Estate Bank introduce new types of loans to meet the need to restore homes damaged by the war. These loans passed through various iterations before the bank specified the following two types: “re-completion of a residential property” and “reinforcement of a damaged residential property.” Both have a ceiling of SYP 10 million.

There is also a unique type of loan that the Real Estate Bank offers: purchase of a residential property for people who applied for a so-called savings housing, one of the government’s social housing programmes implemented by the General Housing Establishment (GHE). The loan goes to the GHE’s account, rather than the applicant. The value of the loan is set at half the estimated value of the home granted through the housing programme. The applicant must repay the loan to the Real Estate Bank within 15 years, at an interest rate of 10.5-11.5 percent, depending on the length of the repayment period.