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Saudi Arabia Enters Homebuilding Business to Tackle Shortage

  • Kingdom to create developer to share profit with builders
  • Saudi Arabia's Fannie Mae to start operating end of this year
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Saudi Arabia is taking an unprecedented hands-on role in housing finance and development as it seeks to re-energize a plan to build more than a million homes and make ownership more affordable.

The Housing Ministry plans to create its a development company and start a mortgage-guarantee fund to encourage banks to increase lending, Minister Majed Al Hogail said in an interview in Riyadh on Thursday. While the ministry will regulate the developer, its final ownership may rest with another state entity, he said.