Refinancing Of housing Loans

The company uses its various sources of funds to provide medium and long-term financing to banks, financial institutions and financial leasing companies by granting these institutions refinancing loans for housing and real estate loans granted by them with the guarantee of real estate mortgages in order to achieve the company's goals and in line with the approved lending policy. Determining the value and term of the loan in line with the need of the borrowing financial institution and the ability of the company to provide the required financing and for the required term at the lowest possible cost after adding the company’s annual margin, which is determined periodically on the basis of covering the administrative costs of the company and achieving a reasonable return for shareholders, so that the financial institution is profitable Higher when using the funds borrowed from the company compared to what it can achieve by using its other sources of funds.

• To be secured by a first-degree mortgage.

• Its value does not exceed 100 % on the current date in proportion to the estimated value of the mortgaged property.

• It must have been granted only for the purposes of building or purchasing new houses or apartments, or for the renovation and renewal of housing units.

•  The weighted average of the remaining term of the mortgage loans in the pool to JMRC for refinance should be at least 140% of the term of the loan being extended by JMRC to the borrowing financial institution.

• Each mortgage loan in the pool is no more than two installments in arrears if repayment is on monthly basis, or less than three months have elapsed since the due date of an installment, if repayment is not on monthly basis.

• Every mortgage loan must have been granted to cover properties put to residential use only and the mortgages thereon provide for foreclosure and taking possession in case of default.

1 - The value of the loan

(a) The value of the loan shall not exceed 83% of the refinanceable housing loan balances.
(b) The loan is granted against the security of first-degree mortgages transferred to company favor, and the remaining value is not less than 120% of the loan principal. The original balances of the mortgages are subject to re-evaluation by the company according to the degree to which the interest rate or other conditions placed on the concerned housing loan diverge. About the prices and conditions applicable to most of the new housing loans as determined by the company.

2- Loan withdrawal procedures

(a) The loan shall be withdrawn within a maximum period of three months from the date of signing the refinance loan agreement.

(b) The procedures for withdrawals from borrowing financial institutions shall be agreed upon for each case separately, in proportion to the company's cash flows.

3- The interest rate charged on the loan

(a) Interest is calculated on the loan on the daily balance, it is credited monthly to a separate account, and it is paid at the end of every six months.
(b) The interest rate charged on the loan shall be reviewed every ( ) year(s) after the date of signing the refinancing loan agreement so that the interest rate is fixed for the subsequent period on the basis of the prevailing return in the local market on the company’s bonds or government bonds of the same duration. Whichever is more reflective of the conditions of interest rates in the market, plus a margin to be agreed upon at the time of granting the loan.

or

A- An annual interest is calculated on the loan on the daily balance and is credited monthly to a separate account and paid at the end of every six months of the life of the loan and this interest is considered an integral part of the loan.

B- The interest rate collected on the loan shall be reviewed every ( ) month(s) from the date of signing the refinancing agreement loan on the basis of the prevailing return in the local market on treasury bills or certificates of deposit issued by the Central Bank of Jordan, which have the same period plus a margin corresponding to it. at the time of granting the loan.
The interest is calculated on the basis of the actual number of days that have elapsed since the funds were in the possession of the borrowing financial institution, considering that the month is 30 days and the year is 12 months for the purposes of the denominator only, according to the following equation:
(Amount x interest rate x number of actual days divided by 360 days)

4 – Delay Interest
In the event that any amounts of the loan principal and/or interest and/or commitment commission or other expenses are due and were not paid on time, the financial institution shall be obligated to pay to the company, one week after the due date, the applicable annual interest rate on the loan, on the due amounts plus It has a percentage of (1%) per month, to be paid after seven days from the due date, until full payment.

5 - Commitment commission
A commitment commission is collected on the loan at the rate of (3%) on the amount of the committed and undrawn refinancing loan. The calculation of this commission starts from the date the financial institution signs the refinancing loan agreement until the end of the withdrawal period. This commission is paid on the same interest payment dates or at the end of the withdrawal period or cancellation of the undrawn loan balance, whichever occurs first. The commission is calculated on the basis of the same formula used to calculate the interest.

6 - Payment

1- The principal of the loan shall be repaid in one payment on the maturity date.

2 - It is not allowed to pre-pay the principal or any part of the loan without the approval of the company, and that approval is subject to a fine.

Prepayment based on the calculation of the difference between the prevailing market interest rate at the time of prepayment and the existing interest rate in the refinancing loan agreement.

3- The term of the loan may be extended once or more by agreement between the company and the concerned financial institution, based on a written request submitted by the concerned financial institution to the company three months prior to the original maturity date. The company's approval, when issued, determines the new maturity date and the interest rate for the next period.

4- The term of loans entered into prior to approval of this amendment may be extended by virtue of an appendix to the refinancing agreement.

• Is a privately owned entity, duly established and operating under the laws of the Hashemite Kingdom of Jordan

• Has had its audited financial statements, for its fiscal year preceding the year within which its respective Refinance Loan Agreement is to be entered into, audited by independent auditors and the report issued by them shall be without reservations.

• Has a sound financial structure and satisfactory financial performance, and the organization, management, staff and other resources required for the efficient carrying out of its operation.

• Has adequate technical and administrative capacity and satisfactory operating policies and procedures for appraisal and monitoring of a mortgage Loan portfolio and for carrying out of its activities to be undertaken under the Housing finance and Urban Reform Project Agreement signed between the International Bank for Reconstruction and Development (IBRD) and JMRC.

• In compliance with the legal and regulatory requirements applicable to its operations, including all relevant banking, financial or corporate laws, capital adequacy requirements and monetary instructions.

Loan guarantees consist of first-Degree mortgages transferred to the company’s favor and related to refinanced housing loans. In this regard, the following should be taken into account:

• The total remaining value of the mortgages or other guarantees shall not- in any case - be less than 120% of the value of the refinance loan.
• The financial institution must confirm that the company's right to the mortgages transferred to it has been duly registered in the appropriate register so that the company can have a full right to this collateral.
• In order to maintain the percentage referred to in Clause (a) above at the end of each Gregorian calendar quarter, the Financial Institution shall transfer additional First-degree Mortgages in favor of the Company or otherwise provide such additional guarantees as the Company may temporarily accept at any time in the following cases: -

1. Reduction the principal of the housing loan through regular payment or advance repayment of any housing loans secured by existing mortgages transferred to JMRC favor.
2. Failure to pay any refinanced housing loan secured by real estate mortgages due to the maturity of more than two installments and failure to pay them, if the repayment periodicity is on a monthly basis, or when three months have passed since the installment due date, if the repayment periodicity is non-monthly.
3. If the financial institution requests replacement of existing mortgages.
4. If changes in the market interest rates lead to a reduction in the financial value of the existing guarantees.

Additional guarantees include:  Jordanian government bonds, bonds issued with a government guarantee, treasury bills issued by the Central Bank of Jordan, bonds issued by the company, or submitting an authorization to debit on the account of the financial institution in the Central Bank of Jordan.