Personal loans cannot become housing loans

TDT | Manama                                                      

The Daily Tribune – www.newsofbahrain.com

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The government has confirmed that personal loans cannot be converted into housing loans, rejecting a proposal to this effect.

Officials warned that such a move could jeopardize current housing schemes and upset the balance of the housing finance system.

This decision was communicated in a letter to the Speaker of the Council of Representatives, Ahmed Al Musallam.

The government clarified that housing loans are strictly designated for securing homes. “The government believes this suggestion could diminish the value of housing loans, making it harder to meet family needs,” it stated.

Financial Burden

Additionally, the government highlighted its efforts to alleviate the financial burden on citizens.

Eskan Bank, in partnership with local banks, offers housing loans through programs like ‘Tas’heel Financing’ and ‘Mazaya,’ designed to keep monthly payments manageable based on individual earnings and what borrowers can afford.

Increased Loan Accessibility To assist those whose salaries don’t qualify for larger loans, the government has raised the minimum loan amount to BD 40,000, with the excess treated as a grant.

Loans can also go up to BD 70,000 with government backing, ensuring citizens have access to loans without excessive pressure.

Salary Deduction Clarifications

Regarding salary deductions, the government noted that some banks do not always adhere to the 50 percent rule; in certain cases, they allow deductions of up to 65 percent, especially for citizens using the Mazaya scheme.

Furthermore, banks may extend mortgage terms to 30 years to reduce the monthly payment burden.

Property Registration Fees

The government also mentioned that it has followed the directives of Crown Prince and Prime Minister Salman bin Hamad Al Khalifa to cover property registration fees for citizens utilizing the ‘Tas’heel’ program.

Additionally, banks involved in the housing schemes offer a ‘Joint Security Over Mortgage Asset Programme,’ allowing citizens to obtain extra mortgage loans alongside their initial ones.

While the government appreciates the Council of Representatives' interest, it stressed that the proposal is unfeasible.

However, it remains committed to working closely with the Council to meet citizens’ housing needs fairly and practically.