In mid-October, Syria’s Real Estate Bank raised the ceilings for all its real estate loans, including loans used to purchase or renovate properties. The bank also added a new personal loan, as well as a personal loan with a real estate guarantee.
Established in 1966, the Real Estate Bank funds various types of loans for buying or renovating real estate properties. The loans differ in the conditions required for obtaining them and the payment methods and ceilings. For all loans the bank provides, the properties in question must be registered in the Land Registry in zoned areas under the control of the Damascus government. A property receiving a loan and entered into a Land Registry must be free of mortgage, documentation, or subdividing issues.
Modifications to existing loans
The ceiling for a loan to purchase ready-built or incomplete property or constructing and cladding a property is now 100 million Syrian pounds. The ceiling of the loan to only clad a property is 60 million pounds.
The interest rate is now 14.50-percent for short-term loans, 15-percent for medium-term loans, and 15.50-percent for long-term loans.
|Loan type||New loan ceiling (SYP Millions)||Old loan ceiling (SYP Millions)|
|Purchasing a ready-built property, an incomplete property||100||50|
|Constructing and cladding a property||100||50|
|Cladding a property||60||25|
The ceiling for a loan to refurbish or renovate a home is now SYP 50 million, while the loan to reinforce a cracked home is SYP 20 million. The loan to terminate a tenancy relationship, that is, for a lessor to recover their property, is now SYP 30 million. The interest rates on the loans are the same as above.
|Type of loan||New loan ceiling (SYP Millions)||Old loan ceiling (SYP Millions)|
For applicants to social housing programmes, which are implemented by the General Housing Establishment (GHE), the loan ceiling for purchasing a ready-made home is now SYP 100 million. The ceiling for a home expansion loan is now SYP 40 million, while the ceiling for completing an expansion with cladding is SYP 30 million. The bank did not specify an interest rate for these loans.
|Loans for social housing programme applicants|
|New loan ceiling (SYP Millions)||Old loan ceiling (SYP Millions)|
|Purchasing a ready-made home||100||50|
The recent amendments also included changes to existing loans provided to housing cooperative communities rather than to housing cooperative applicants. The loan ceiling for purchasing a property in such cooperatives is now SYP 100 million; the ceiling for constructing a property without cladding is now SYP 40 million; and the ceiling for completing construction of a fully-structured property is now also SYP 40 million. Cooperatives may now also be granted loans to build residential suburbs with a ceiling of SYP 100 million per apartment.
The interest rates are as follows: 13.50 percent for short-term loans, 13.50 percent for medium-term, and 14 percent for long-term.
|Loans for housing cooperatives||New loan ceiling (SYP Millions)||Old loan ceiling (SYP Millions)|
|Constructing and cladding a property||100||50|
|Constructing a property framework||40||15|
|Cladding a property||40||–|
|Per apartment in a residential suburb||100||–|
According to the head of the Real Estate Bank, the new loan ceilings are meant to keep up with the rising costs of cladding, restoration work, and other payments due to increased local real estate market prices. He added that the recently amended loan ceilings are not final and will be re-evaluated soon alongside high inflation rates.
The bank director added that the bank will not finance SYP 100 million property purchase loans but that the applicants must contribute to covering that amount by making a financial deposit. He explained that the new loan ceilings for purchasing properties would help people buy homes in suburbs and rural areas rather than in urban centres due to the high city costs. According to the director, the most commonly requested loan is the restoration loan, whose ceiling has increased by more than 100 percent and which will help many people repair their damaged homes.
In all cases, the bank requires that a loan recipient secure several guarantors working in the public sector.
Meanwhile, in late October, the bank also issued a circular announcing that it would grant two no types of personal loans:
The first personal loan has a ceiling of SYP 10 million and is granted to workers in the public sector and state institutions. The loan is granted with the worker’s salary serving as a guarantee and with guarantors who must also be state employees, so long as their registration period in the Social Insurance Institution occurred less than one year ago.
This type of loan may also be granted to civil and military retirees so long as they have guarantors who are currently employed state employees.
The interest rate for this type of loan is 14.5 percent for a five-year payment period and 15 percent for a seven-year payment period. The interest rates are lowered by one percentage point for loan recipients who are family members of fallen regime soldiers.
Finally, the repayment of this loan is arranged so that the monthly payments do not exceed 40 percent of the combined salaries of the recipient and their guarantors, with a repayment period of no more than seven years.
On the other hand, a second personal loan has a ceiling of SYP 50 million. This loan is granted under a real estate guarantee that must be acceptable to the bank. The loan is meant for owners of agricultural projects, small- and medium-scale industrial projects, small- and medium-scale alternative energy projects, and people with low incomes. Recipients who are family members of regime “martyrs” may receive the loan with an interest rate one percent lower than those offered to other recipients.
According to a statement by the Real Estate Bank’s assistant director to the Al-Watan newspaper, this type of loan is not meant for constructing new projects but rather to help finance existing projects, restore production lines, and purchase equipment or other necessities, among other things.
The interest rate for this type of loan is 17 percent for a five-year repayment period and 17.50 percent for seven years. The interest rate is also one percent lower for family members of fallen regime soldiers.
The bank’s coverage of personal loans with real estate guarantees should not exceed 50 percent of the value of the property subject to the guarantee if it is located within the zoning plans for a city and should not exceed 40 percent of the value of properties located outside of cities. The property must also be located in safe areas so that the property can actually be sold, if needed. Finally, the repayment period for this loan can be no longer than seven years.