Why is The Ministry of Housing partnering with developers?

To provide the residential unit at a price that suits the income of the beneficiaries of the ministry

Why does the developer enter into a partnership with the ministry?

• Access to the database of beneficiaries of the Ministry of Housing
• Reduce investment risk
• Allow developers to implement multiple projects at reasonable costs
• Package of financial and non-financial incentives.

What are the types of partnership?

• Partnership on private land
• Partnership on the Ministry lands
• Partnership on idle lands ( Undeveloped urban land Plots )

How does the developer become qualified?

Via the Off Plan Sales committee “ WAFI”

What are the Ministry's incentives for developers?

• Reducing the cost of lands
• Interest-free financing
• Increase in the floor to area ratio (FAR)
• Provide support to decrease the time required to obtain permits and licenses
• Off plan sales and support services
• Guarantee - Ensure the purchase of unsold units

What are the Ministry's exemptions that are provided for the developer?

Exemptions form some construction requirements

What is the mechanism of exemptions?

By land area, location of the project, and demand in the area. The developer should contact Shrakat to examine exemptions by project proposal and exceptions.

What are the exemption models?

Depending on the readiness of the technical and financial proposals from the developer, and meeting the requirements for obtaining the exemption.

Why wouldn’t it be a comprehensive exemption of the entire land of the developer even the part that is not included in the housing projects?

Each project is evaluated separately, and Shrakat can be requested to study the project and its feasibility, to achieve benefit for all parties.

Is the developer entitled to sell the land with exemptions to another developer? Does the developer require the purchaser of the land to have a contract with the ministry?

The developer is not entitled to sell the land with exception, but to develop it in favor of the project agreed upon with the ministry. Regarding the contract, there must be prior agreement between the developer and the owner of the land to authorize the developer to contract with the ministry.

What are the requirements for designing the units?

There are no specific conditions for this, and any suitable residential product can be suggested and discussed with the Urban Development Department to reach the ideal product.

What are the requirements of services and streets on the public site?

The same requirements approved by the Ministry of Municipal and Rural Affairs for residential plans.

How does the developer know the number of target units per region?

Shrakat will provide the information for the developer who will inquire about the need and quantity of projects offered in all regions of the Kingdom.

Mechanism of approving plans?

From the Ministry of Municipal and Rural Affairs, and can be provided through the developer services center (Etmam).

What are the necessary permits?

The developer services center (Etmam) should be contacted to provide the developer with the required requirements and permits according to the project.

Does the Ministry provide approvals for increasing the electricity and water loads resulting from increasing the floor to area ratio (FAR) ?

In cooperation with the relevant authorities through (Etmam), and based on the developer studies that confirm that the capacity of the infrastructure is sufficient, that can be submitted to take the necessary approvals.

Who bears the costs of increasing loads of electricity and water if needed?

They will be placed on the final product price

Are there contracting companies who can execute at the prices requested by the Ministry?

Yes, the prices proposed by the Ministry are indicative prices, and can be discussed according to the justification of the developer and the nature of the project.

Dose the developer have the right to market and sell to non-beneficiaries of the ministry when units are unsold?

Yes, as agreed at the stage of marketing and selling

Can the price cap increase for the beneficiaries of the ministry who’s income is higher than the than standard?

The ministry targets prices from 250 to 750 thousand riyals, and there is no objection to increasing the price according to the justification of the developer and the nature of the project and after considering the purchasing power of beneficiaries in the target area.

What happens if the units were reserved at the time of marketing and the beneficiary declined at the selling stage?

Re-promotion to ensure the sale of the project

What is the payment method from the ESCROW account?

The amounts of the units sold are collected in the ESCROW account and the payment is made based on the percentage of completion or by bank guarantee.

What is the interest-free loan and how to pay it and get it?

Interest-free loan will finance the project ESCROW account, and the loan amount is determined by the price of the sold meter.

How to pay the owner of the land?

In agreement with the developer and owner of the land.

Will the Ministry buy unsold units?

The Ministry can encourage the developer to ensure the purchase of units not sold according to the project's feasibility from the Ministry perspective.

Can the developer make use of commercial parts of the land during the development of the residential part or should he wait until the completion of the project?

Yes, the developer has the right to do so in the event that the land is private, and if it is on the territory of the Ministry, it will be agreed upon in the conditions booklet.

Will the Ministry purchase unsold units after execution?

Construction will only take place after units are sold.

What is the possibility of sorting the unsold parts of the instrument so that the developer can benefit from them? What is the followed mechanism , if allowed?

We also mentioned that the execution will not commence unless units are sold, and any mechanism that the developer sees could be used if the land is private.

Is the Ministry buying lands or projects?

No, but the ministry studies the feasibility of marketing the project to the beneficiaries of the ministry.





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