Thirteen thousand Emirati families living in the Northern Emirates will be able to receive interest-free home loans under a new government plan, it was announced on Thursday.
A total of Dh11.5 billion ($3.1bn) will be given to select families in Sharjah, Ajman, Ras Al Khaimah, Umm Al Quwain and Fujairah in the first phase of the plan, which will take place between 2022 and 2026.
Emiratis must submit requests to the Ministry of Energy and Infrastructure to obtain housing loans through the country’s Sheikh Zayed Housing Programme.
The project was announced by Sheikh Mohammed bin Rashid, Vice President and Ruler of Dubai, on May 9.
To be eligible, the main earning member of the household should have a monthly income of at least Dh15,000. Those eligible can apply for a loan of up to Dh800,000 but the monthly loan instalment should not exceed 16 per cent of the applicant’s salary.
Several local banks will disburse the loans, though it is not currently known which are on the list.
Borrowers pay the principal loan amount of Dh10.4 billion but the government will cover the interest rate of Dh1.1bn.
They can also buy construction materials at discounted prices after the ministry reached an agreement with a number of suppliers. The list of these suppliers will be released at a later date.
“The revised policy will help to clear the backlog of applications from previous years,” said Suhail Al Mazrouei, Minister of Energy and Infrastructure.
“A smart system will analyse the data and assess the circumstances of applicants based on the information they provide about their financial, social and housing conditions.”
This data will help the ministry to prioritise urgent cases.
“Having a home is a priority, it is not owning a fancy car and people need to get their priorities right,” Mr Al Mazrouei said.
Ministry employees will visit the homes of senior citizens and disabled people who may face difficulty in submitting online requests.
“After the programme was approved by the UAE Cabinet, we met with the Ministry of Finance to identify sustainable financing options in co-operation with local banks,” Mr Al Mazrouei said.
“The new programme will focus on the Northern Emirates — Sharjah, Ajman, Ras Al Khaimah, Umm Al Quwain and Fujairah.”
He said local authorities in Abu Dhabi and Dubai will provide separate housing financing for their citizens.