x Abu Dhabi, UAEThursday 18 January 2018

Sharjah and bank offer home loans

A new programme provides funding, including no-interest loans, for low-income Emiratis to get housing.

SHARJAH // The Sharjah Government will work with Emirates Islamic Bank to provide grants and loans for all public housing projects.

The agreement is one of the first major moves by the year-old Department of Housing.

The programme is the first time the Government has worked with a private bank to provide public housing, said Eng Khalifa Al Tunaiji, the director general of the Department of Housing.

"The emirate of Sharjah has carried out several public-housing projects," Mr Al Tunaiji said. "In the last 35 years we have built 9,422 public houses at a cost of Dh4.5 billion.

"Last year the Ruler passed a decree forming the Department of Housing, which is now coordinating all the emirate's housing projects."

The directorate has 18,500 housing applications from locals, Mr Al Tunaiji said. "We shall be sorting out the priorities and by next year each category will be able to know when they can get their housing loans deposited," he said.

Loans fall into three categories. Emiratis with a monthly income of less than Dh15,000 will receive Dh650,000 from the Government for their home.

Those who make more than Dh15,000 can get a Dh650,000 loan, payable in five to 25 years, with the Government paying any profit. Under Islamic finance rules interest is illegal but similar payments, referred to as profit, are not. The third category, for bigger earners, has not yet been defined but those who qualify will have to repay the loans, plus profit at a below-market rate.

Mr Al Tunaiji said all other rules of public housing applied and homes obtained through the programme could not be sold later.

Walid Al Sayegh, the director general of the Department of Finance, said the agreement was a leap in efforts to address families' concerns about finding decent housing.

"For us as finance directorate, our role will be to follow up with the Emirates Islamic Bank and ensure that the programme benefits get to their deserved beneficiaries," Mr Al Sayegh said.