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Sunday, 24 February 2019

CBE amends how state-subsidized mortgages to low-income households will be dispersed

CBE amends how state-subsidized mortgages to low-income households will be disbursed: The central bank amended the terms for how the state will doll out mortgage subsidies under the Mortgage Finance Fund, nearly a month after announcing it would restrict these subsidies solely to low-income households. The note from the CBE (pdf), which was issued on Thursday, instructed banks to provide the mortgage at rates of 5-7% from their own reserves, without receiving the funds from the Mortgage Finance Fund beforehand. The fund will then remunerate the banks for the difference between the rate offered under the CBE initiative and the corridor rate. The CBE first launched the fund in 2014 with an initial EGP 10 bn disbursement and added a second EGP 20 bn disbursement late last year. Governor Tarek Amer previously stated the program caused the bank to incur significant losses.

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