Kuwait Cabinet Approves Draft Mortgage Financing Law With a 25 Year Repayment Limit
Kuwait’s Cabinet approved a draft decree law on mortgage financing for beneficiaries of housing welfare on Tuesday and referred it to the Amir, Sheikh Meshal Al Ahmad Al Jaber Al Sabah, for consideration. The Minister of State for Municipal Affairs and Minister of State for Housing Affairs, Abdulatif Al Mashari, set out the draft in 15 articles in remarks to the Kuwait News Agency after the meeting, with repayment in equal monthly instalments over a period not exceeding 25 years from first disbursement.
Two uses, one eligibility test
Article 2 would allow financing to buy a housing unit from a developer under Law No. 118 of 2023 on establishing companies to construct and economically develop residential cities or areas, as amended by Decree Law No. 89 of 2025, or to build on a government plot allocated by the Public Authority for Housing Welfare, subject to that authority’s conditions in completed and ongoing housing projects. Article 3 sets eligibility for supported financing at the general conditions in the Kuwait Credit Bank real estate loan regulations, and requires that the beneficiary has not previously received housing welfare from the state. Article 4 allows supported and non supported financing to be combined under rules set by the Central Bank of Kuwait, and leaves the beneficiary responsible for the principal on both and for the interest or returns on the non supported part, while the state carries the cost of interest or returns on the supported part.
| Article | Provision |
|---|---|
| 3 | Credit Bank loan conditions, and no previous housing welfare |
| 4 | Supported and non supported financing may be combined under central bank rules |
| 5 | Equal monthly instalments, repayment not exceeding 25 years from first disbursement |
| 7 | Rescheduling on default for a period not exceeding 5 years |
| 9 | Ministry of Finance pays supported interest or returns from the General Reserve through the Credit Bank |
| 10 | Credit Bank, on behalf of the state, guarantees the outstanding supported balance if the beneficiary defaults |
| 13 | Central Bank sets the rules and the rate on non supported financing |
| 14 | Executive regulations by decree within 6 months of publication in the Official Gazette |
Kuwait News Agency, Cabinet statement and the housing minister’s account of the draft, 22 September 2026.
The state keeps the subsidy and the risk
Under Article 9 the Kuwait Credit Bank would act for the state in signing agreements with financing entities, and the Ministry of Finance would pay the interest or returns on supported financing to the Credit Bank from the General Reserve, which would pass them to the lenders. Article 10 makes the Credit Bank, acting on behalf of the state, the guarantor of the outstanding supported balance if a beneficiary defaults, and Article 11 gives it a mortgage over the property in return, effective only through an official mortgage contract. Article 12 would let the Credit Bank, or an entity the competent minister names, buy all or part of the mortgage financing provided to beneficiaries by financing entities. Article 7 requires lenders to notify a beneficiary who falls behind and allows rescheduling for up to five years, with the beneficiary paying the interest or returns arising from the rescheduling period.
Why it matters: housing welfare in Kuwait has been delivered mainly through state built units and subsidised credit from a state lender. This draft would bring banks and other licensed financiers into the system, while leaving the subsidy bill with the Ministry of Finance and the guarantee, given on behalf of the state by the Credit Bank, which takes the mortgage in exchange. That makes it a fiscal design as much as a housing one.
Outlook: the draft is with the Amir, and Article 14 gives six months from publication in the Official Gazette for executive regulations, with Article 15 applying the provisions to beneficiaries only once those regulations are published. The account of the draft sets no financing ceiling, no borrower contribution, no pricing for non supported financing and no list of eligible financing entities, and the rate on the non supported part is left to the Central Bank.
Sources: Kuwait News Agency.
