Wednesday, July 20, 2011

New decree in UAE permits waiver in housing loan amount

According to latest decree issued by the Vice President and Prime Minister of UAE and Ruler of Dubai, H.H. Sheikh Mohammed bin Rashid Al Maktoum, certain percentage of the housing loan amount of a borrower can be waived, if the borrower has repaid a loan prior to its maturity date.

As per the Decree No.22/Year 2011, if a borrower of home loan, granted by MRHE (Mohammed Bin Rashid Housing Establishment), reimburses the loan amount prior to its maturity date, the borrower will be exempted from repayment of full amount. The waiver will be calculated based on the table issued as annexure to the decree Article 2.

According to Article 3 of the decree, the borrower will have to pay the remaining loan amount in a single installment, after reducing the percentage of concession, to become eligible for the waiver. The borrower will also have to prove that construction of the house has been completed, and that he is the true owner of the house.

The new decree fixes Dh.300,000 as maximum amount of exemption.

Article 4 stipulates that any late premiums paid by the borrower will not be included for calculation as part of single instalment of full repayment for the calculation of percentage of waiver.

The Article 5 stipulates that Board of Directors will revise the percentage every three years, or when the need arises to amend them. The decree will annul all provisions existing in any laws that contradict with it, and will be published in the official gazette.

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