Saudi Real Estate Refinance Company (SRC) has entered into an agreement with Ginnie Mae, a US government-owned corporation operating within the Department of Housing and Urban Development, for sharing policies and regulations in the housing finance sector.
A wholly-owned unit of the kingdom’s Public Investment Fund (PIF), the SRC said the collaboration is aimed at supporting affordable housing and the mortgage market for citizens in both the US and the Kingdom of Saudi Arabia.
Established in 1968 under the National Housing Act, Ginnie Mae’s primary function is to provide US government guarantees for mortgage-backed securities issued by private financial institutions.
Currently, Ginnie Mae’s outstanding portfolio of mortgage-backed securities has reached approximately $2.4 trillion, accounting for 25-30 percent of the US mortgage market.
SRC was established in 2017 by PIF as part of the Kingdom’s Vision 2030 Housing Program and aims to provide refinancing and balance sheet management solutions to primary mortgage financiers, in a bid to increase the availability of affordable housing finance options for Saudi citizens.
Since its inception, SRC has actively participated in the capital markets, contributing to the development of the financial sector and supporting the economic diversification outlined in Vision 2030.
According to SRC, the agreement is a non-legal binding collaboration that will cover three areas, including, bilateral dialogues with housing finance regulatory and policy agencies, roundtable discussions among experts on policies and financial and counter-party risk management, and professional training or exchange on technical issues related to policy objectives, mortgage securitization, capital market risk management, real estate finance, and taxation.
In addition to SRC, other institutions in Saudi Arabia will have the opportunity to participate in technical and policy discussions as the agenda takes shape.
