The Maldives Monetary Authority (MMA) has announced plans to introduce a new loan program aimed at making home ownership more accessible for residents of the Malé region. The Inclusive National Affordable Housing Scheme seeks to ease the housing shortage by enabling banks to provide financing for affordable housing purchases.
According to the MMA, regulations for the scheme have now been finalized and made public. Under these regulations, banks are required to allocate 10% to 15% of their loan portfolios specifically for the housing scheme, which will operate for a period of five years. The loans issued under the scheme will carry a maximum repayment period of 25 years, with borrowers free to opt for shorter terms.
The program aims to facilitate financing for around 3,500 housing units within the five-year duration. To achieve this, the MMA has introduced two financing models: Type A – Lease Ending with Ownership, and Type B – End-User Financing Option.
Type A: Lease Ending with OwnershipThis model targets housing projects financed and executed by banks or the scheme’s operating authority. It carries an annual profit rate of 5% in accordance with Islamic financing principles. No collateral or equity is required, though a security deposit may be necessary during the lease period. Upon full repayment and completion of the lease term, ownership of the housing unit will be transferred to the borrower.
Type B: End-User Financing OptionThis model is designed for individuals seeking to purchase housing units from developers or investors. It carries a maximum annual profit rate of 6%, also in line with Islamic finance principles. Under this option, buyers are required to contribute 5% equity, and the property purchased must be mortgaged.
The MMA emphasized that housing units eligible under this scheme must come from projects authorized by the Authority. The initiative is expected to mark a significant step toward addressing the longstanding housing challenges in the Malé region, while supporting households in achieving secure and affordable home ownership.
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