Saudi Real Estate Refinance Co. (SRC) and Banque Saudi Fransi (BSF) have signed their third residential mortgage portfolio acquisition agreement, extending a partnership designed to inject liquidity into Saudi Arabia’s housing finance system and deepen the secondary mortgage market.
The latest transaction, signed under the patronage of Minister of Municipalities and Housing and SRC Chairman Majid bin Abdullah Al-Hogail, builds on years of cooperation between the two institutions. By purchasing mortgage assets from lenders such as BSF, SRC can return liquidity to the originating institution, strengthening its capacity to continue providing housing finance while supporting development of a more active secondary market.
Key Overview
- SRC and BSF have signed their third residential mortgage portfolio agreement.
- The transaction is intended to provide liquidity to financing institutions and support further residential lending.
- The partnership dates back to 2018, with a second portfolio purchase agreed in 2021.
- SRC’s refinancing model is designed to strengthen Saudi Arabia’s secondary mortgage market and broaden funding channels for lenders.
- The deal supports the Housing Program and wider Saudi Vision 2030 objectives for a more efficient and sustainable housing finance ecosystem.
Third Deal Extends a Long-Running Mortgage Partnership
The latest agreement marks the third time SRC has agreed to acquire a residential mortgage portfolio from BSF. The third portfolio transaction is intended to strengthen the efficiency and sustainability of the Kingdom’s mortgage market while supporting the financing capacity available to housing lenders.
The relationship between the two institutions is not new. In 2018, they entered an arrangement covering long-term fixed-rate mortgage funding and the acquisition of part of BSF’s mortgage portfolio. The structure was designed to increase the bank’s liquidity and help it extend additional home financing.
Their cooperation expanded again in 2021 when SRC signed a second housing-finance portfolio purchase. That transaction was designed to provide long-term liquidity to the housing market and further develop the Kingdom’s secondary home-financing system.
The third agreement therefore represents continuity rather than a one-off transaction. Repeated portfolio purchases allow mortgage assets originated in the primary market to be refinanced, giving lenders another mechanism through which liquidity can be recycled into future lending.
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Why Mortgage Portfolio Refinancing Matters
Mortgage refinancing operates differently from the original home loan provided to an individual borrower. SRC primarily works with banks and finance companies that have already originated mortgage financing, providing a refinancing layer behind the retail housing market.
Saudi regulations define real estate refinancing around providing liquidity and facilitating mortgage-rights trading in the secondary market. When eligible mortgage portfolios are sold or refinanced, lenders gain an additional source of liquidity that can support their capacity to originate further financing.
A stronger secondary market also reduces reliance on a model in which every mortgage remains entirely with its original lender throughout its duration. Portfolio transactions can give financial institutions additional balance-sheet flexibility while creating a larger pool of mortgage assets that may ultimately connect housing finance with longer-term capital-market funding.
SRC CEO Majeed bin Fahd Al-Abduljabbar said continued cooperation with financing entities helps them expand residential mortgage financing while supporting improvements in secondary-market efficiency and sustainability. BSF CEO Badr bin Hamad Al-Salloom also described the transaction as an extension of the institutions’ strategic partnership and their commitment to expanding financing solutions in the Kingdom.
SRC Strengthens Saudi Arabia’s Housing Finance System
SRC was established in 2017 to develop Saudi housing finance and is owned by the Public Investment Fund, giving the company a specialised role in the Kingdom’s mortgage ecosystem. It operates under a Saudi Central Bank licence and focuses on providing liquidity and refinancing solutions to mortgage originators rather than issuing home loans directly to individual buyers.
Its role is closely tied to building a deeper secondary mortgage market. By purchasing and refinancing portfolios from banks and finance companies, SRC can help lenders access liquidity while creating the scale required for mortgage assets to become a more established component of Saudi Arabia’s capital markets.
The regulatory framework itself identifies secondary-market growth and stability as core objectives of real estate refinance activity, alongside improving lenders’ access to liquidity for financing homeownership.
These efforts complement broader housing reforms aimed at improving the efficiency and accessibility of the real estate sector. Expanding the infrastructure behind mortgage financing is important because rising homeownership depends not only on the availability of properties but also on a financial system capable of funding housing sustainably over long periods.
Third Agreement Signals a Maturing Secondary Market
For BSF, the new agreement provides another channel through which mortgage assets can be refinanced and liquidity recycled. For SRC, repeated transactions with established lenders help create the transaction history, market scale and institutional relationships required for a more developed secondary mortgage market.
The significance of the third agreement therefore goes beyond a single portfolio acquisition. It illustrates how Saudi Arabia is building an institutional refinancing layer behind its retail mortgage industry, allowing lenders to originate housing finance while creating mechanisms for those assets to move through the wider financial system.
As this secondary market expands, SRC’s partnerships with banks and finance companies are likely to remain an important component of efforts to create a more liquid, resilient and sustainable housing finance ecosystem aligned with the Kingdom’s long-term economic transformation.
Sources used: Saudi Press Agency / Saudi Real Estate Refinance Company / Public Investment Fund / Saudi Central Bank / Saudi Gazette / Saudi Vision 2030
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