The Housing Bank has restarted housing loans for the first time since Lebanon's financial crisis, backed by a 50 million Kuwaiti dinar facility from the Arab Fund for Economic and Social Development.
Lebanon's Housing Bank has resumed lending in early 2025 after securing long-term financing, marking a significant recovery in the country's housing finance sector following years of paralysis during the banking crisis. The move offers renewed access to affordable mortgages at a time when property prices and living costs have made homeownership increasingly difficult for Lebanese families.
The resumption rests on a 50 million Kuwaiti dinar facility provided by the Arab Fund for Economic and Social Development, or AFESD. Since early 2025, the bank has extended housing loans to more than 1,200 Lebanese families, primarily from low- and middle-income households. Approximately $80 million has been drawn from a total financing package valued at around $165 million.
Antoine Habib, the bank's chairman and general manager, stated that the strategy prioritizes long-term financing compatible with the nature of housing loans, which require stable funding over extended repayment periods. Rather than relying on a single source, the bank aims to diversify financing through partnerships with Arab development funds and international financial institutions capable of providing concessional funding.
The interest rate on AFESD-funded loans stands at 5.75 percent following a recent reduction from 6 percent. Current financing programs offer purchase and construction loans of up to $100,000 with repayment periods of up to 20 years for home purchases and 18 years for construction. Renovation loans are available up to $50,000 with repayment periods extending to 10 years, all at a fixed rate of 5.7 percent during the first year.
The bank has introduced renovation loans denominated in Lebanese pounds, reaching up to LBP 2 billion, repayable over 10 years at an annual interest rate of 7 percent. This addresses the reality that many Lebanese citizens earn salaries in local currency and would face exchange rate risks with dollar-denominated loans.
Beyond home purchases and construction, the bank provides financing for home renovations, improvements, solar energy installations, and wastewater treatment systems. These programs aim to improve living conditions while helping households reduce long-term energy and utility expenses.
Eligibility criteria include Lebanese nationality or residency status, income level, property ownership details, the loan's intended purpose, and credit standing. The programs remain accessible to both Lebanese residents and members of the Lebanese diaspora. The bank evaluates borrowers' repayment capacity, property value, loan-to-value ratios, collateral requirements, and insurance coverage to ensure long-term sustainability.
Habib stated that the bank prioritizes low- and middle-income households and people with disabilities, groups that often face obstacles in accessing conventional commercial loans. He emphasized that loan assessment focuses on transforming demand into financially sustainable lending, with priority given to applicants purchasing a primary residence rather than financing speculative real estate investments.
Habib stressed that the Housing Bank measures success not by loan application volume but by its ability to ensure loans improve living standards without creating excessive financial burdens. He noted that housing finance requires stable, long-term funding and cannot depend on short-term financing sources, establishing the foundation for the bank's diversification strategy.
Demand for housing loans has risen significantly due to property price increases, higher construction costs, escalating rents, and declining purchasing power. Many Lebanese families possess stable incomes but lack the financial capacity to purchase homes without affordable long-term financing, a gap the bank's renewed operations now addresses.
The Housing Bank's resumption signals a shift in Lebanon's approach to housing finance following the country's economic collapse. The reliance on concessional Arab financing reflects both the limitations of domestic commercial credit and the importance of regional development institutions in supporting Lebanon's economic recovery.
The bank's focus on sustainable lending practices and environmental investments, including solar installations and wastewater treatment, positions housing finance as a mechanism for both residential stability and infrastructure improvement. These programs reflect an effort to align housing development with broader economic and environmental priorities.
