Housing Loan Recipients Risk Foreclosure Amid Unemployment

State-owned banks in Syria continue to demand that thousands of borrowers repay their housing loans — without taking into account the drastic changes that have affected their income and employment status following the fall of the Assad regime on December 8, 2024. Those most affected by this demand are public sector employees who were arbitrarily dismissed after the regime collapsed, losing their sources of income to repay their loan repayment instalments. As a result, their mortgaged properties are at risk of foreclosure and being sold at public auction. While banks claim they have not yet taken legal action against defaulters, the absence of new directives leaves borrowers and guarantors in a state of deep uncertainty and anxiety.

Estimates of the number of employees dismissed after the fall of Assad vary widely, ranging from 300,000 to 600,000. According to a source at one state-owned bank, a significant portion of those dismissed were military personnel. The source indicated that about 20 percent of those arbitrarily dismissed had previously taken out bank loans, including housing loans, particularly among civilian employees. Despite the alarming nature of these figures, the source noted that banks lack accurate data on how many had specifically obtained housing loans, explaining that complex lending conditions had always posed a barrier to the expansion of this borrower group.

For example, the Real Estate Bank—a public institution established in 1966—played a central role in financing the purchase and renovation of homes by offering various types of mortgage loans. The bank consistently required that the property be located within a zoned area under Assad regime control and that its legal documentation be complete and free of any registration or subdivision issues. In addition, strict conditions were imposed on borrowers, such as presenting a Land Registry extract, a construction permit, a subdivision plan, and a certified income statement. Depending on the type and value of the loan, borrowers were required to provide guarantors who were public sector employees or to prove a high income if they were self-employed. Following several consecutive raises, the ceiling for purchase loans was set at  SYP100 million in 2022—the last adjustment before the fall of the regime, repayable over a period ranging from 5 to 15 years, with interest rates reaching up to 11.5 percent. The loan usually covered 60 percent of the property value based on the bank’s assessment. The Real Estate Bank also offered a special loan to subscribers of savings-based housing within social housing programmes, with the loan amount paid directly to the General Housing Establishment (GHE) and repaid by the subscriber over 15 years.

Alongside the Real Estate Bank, both the Commercial Bank of Syria and the Popular Credit Bank have been offering housing loans since 2021, with varying interest rates. Lending conditions remained highly complex, as a single employee’s salary was usually insufficient to cover the monthly payment. This led most borrowers to involve guarantors or co-payers—sometimes two—provided they could prove a high income, even if self-employed. Access to these loans was further complicated by high interest rates, which reached up to 16 percent at the Popular Credit Bank and started at 10 percent at the Commercial Bank, placing a heavy financial burden on borrowers. In the event of default, banks follow a strict procedure that begins with a foreclosure warning to the borrower or guarantor, followed by the sale of the property at public auction to recover the remaining loan amount, with any surplus—if any—returned to the property owner. However, banks resort to this step only as a last resort after exhausting all other options.

Although no new executive instructions have been issued since the regime’s fall, state banks maintain that they continue to adhere to legal conditions when dealing with loan defaulters. A senior banking source told The Syria Report that the banks have not yet begun taking action against these defaulters, but they “will,” because “they must repay,” as he put it—stressing that the bank retains full legal rights to recover the loan. According to the source, these measures do not take into account the borrower’s personal circumstances or their arbitrary dismissal from employment, since the bank “treats the borrower as a customer” and demands fulfilment of financial obligations regardless of income source or employment status. This rigid approach threatens not only the borrower but also their guarantors, who may have mortgaged their own properties in favour of the main borrower. In cases where the borrower is unable to pay, the guarantor is legally obliged to cover the debt, or else face the same consequences—including foreclosure and auction.

Amid rising fears of losing mortgaged homes, legal experts told The Syria Report that the problem goes beyond the authority of the banks and the Ministry of Finance, and requires an exceptional legislative solution. Addressing the housing loan crisis faced by Assad-era public employees cannot be achieved through an administrative decision but needs a decree or specific legal text to reschedule these loans and exempt borrowers from high interest rates, potentially alleviating the risk of home loss. Without such legislation, the only option left for defaulters is to take their case to court, filing a lawsuit based on their extraordinary or emergency circumstances. However, this path is impractical due to the lengthy duration of court proceedings, during which the bank could proceed with foreclosure and sale before any ruling is issued. This renders judicial action insufficient to protect borrowers and guarantors in the short term.

At the time of this report, state banks and official bodies remain silent on the issue of loan defaulters. “No new instructions so far” is the only phrase repeated by banking officials contacted by The Syria Report. This complete absence of any clear vision or transitional measure has only deepened the anxiety of thousands of affected individuals who have been unable to pay their instalments for months—whether due to job loss or because of instalment values far exceeding their now non-existent income.