Under construction residential units (Off plan)

Under construction residential units (Off plan) product subsidized by REDF:

It is financing the purchase of a property under construction or what is called (off plan), whether it is (villa, apartment, townhouse) through one of the Ministry of Housing projects, subsidized profits for an amount of up to 500,000 Saudi riyals compatible with the provisions of Islamic Sharia and provided to REDF and the Ministry of Housing beneficiaries.

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 the finance is paid by monthly installments until the amount is fully paid.

Product concept:

SABB owns metal purchased from the global market and sells them to customers as agreed upon fixed profit rate, soon after purchasing metals from SABB, by issuing an official power of attorney for SABB, 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.


Example

 Tawrruq
Early payments fees Monthly Installment* Payment Method Financing Period APR* Variable or fixed profit margin Max Financing Amount Property Value
Profits for the next three months   3,030.00 Principal amount plus profit margin 25 Years  6.78% Fixed  90%  500,000
*The annual percentage rate and the monthly installment may change based on the value of the financing, the financing period, and the profit margin currently approved by the bank

Rates/prices presented are examples and they may vary depending on different factors such as the customer’s credit history and worthiness.


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
  • Home Finance application form
  • Sale contract
  • Medical questionnaire
  • Full Medical questionnaire if the amount above 3,000,000

Product specifications and features:

  • Approved by Shariah Board as Tawarruq form
  • 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
  • Administrative fee 1% of the value of the financing or SAR5000, whichever is lower, excluding VAT.
  • Minimum salary starting from 3,500 SAR
  • Possibility to reduce the down payment
  • 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 and 70% of else.
  • Step up payments as per customer obligations. Allow customer to obtain 2in 1 products.
  • Step down payments on retirement- the customer will have a reduced installment after retirement in accordance with the pension

Product obtaining steps:

  • Obtain approval for housing support from Real Estate Development Fund (REDF) and the Ministry of Housing
  • Apply for a Home Finance
  • Valuation of customer's financial capacity
  • Initial financing approval
  • Request study
  • Final approval of the financing request