Saudi Arabia’s mortgage-refinancing firm has bought a portfolio of home loans worth more than 3 billion riyals ($800 million) from the Public Pension Agency, as the kingdom’s equivalent of Fannie Mae and Freddie Mac in the U.S. steps up activity.
The Saudi Real Estate Refinance Co., established in late 2017 by the kingdom’s sovereign wealth fund, aims to deploy around 20 billion riyals before the end of the year, mostly by buying up mortgage portfolios from other lenders, it said in a statement. The latest deal is the largest so far for the company, which had assets of about 2.25 billion riyals at the end of 2019.
Saudi citizens have complained for years about the availability and affordability of housing, and boosting home ownership is one of Crown Prince Mohammed bin Salman’s key goals. The refinancing company was established to buy home loans from banks and other finance companies, freeing up the lenders to book more mortgages.
“The agreement provides the mortgage financing industry an opportunity to refinance their assets, that would otherwise be sitting in their books for a decade or two, by offloading mortgage portfolios,” Fabrice Susini, the company’s chief executive officer, said in the statement.