About Jmrc

Who are the target parties for the company to deal with?

Banks and leasing companies (owned by banks) that grant housing and real estate loans, so that the company deals only with these entities.

What is the purpose for which the company was established?

1. Developing and improving the housing finance market in the Kingdom through the company providing financing - medium and long term - to banks and financial leasing companies (owned by banks) that grant housing and real estate loans.
2. Encouraging and developing the capital market in the Kingdom by issuing loan bonds in the local capital market, which contributes to increasing the investment tools available in the market.
3. Opening an Islamic window in order to provide medium and long-term financing to banks and financial institutions operating in accordance with Islamic Sharia.

When was JMRC Established?

The Jordan Mortgage Refinancing Company, a public shareholding company, was established in June 1996 under the direction of the government, in cooperation with the International Bank for Reconstruction and Development, and with the support of the Central Bank of Jordan.

About bonds

Are the loan bonds issued by the company guaranteed?

These bonds are not guaranteed by a government agency or any specific residential mortgages in favor of the holders of these bonds, but they are secured by the company's assets, including refinancing loans, housing loans granted to financial institutions, with the guarantee of first-class mortgage bonds transferred to the company's order and duly documented, and their residual values are not less than At the end of each quarter for 120% of the company's loan value in each case and throughout the loan period. Note that the company does not undertake not to add more liabilities to it, nor does it undertake not to distribute dividends to shareholders.

Does the company issue bonds with a variable interest rate?

Yes, these bonds are issued at a fixed or variable interest rate during the bond term, as the case may be, whether by bidding, prior determination of the interest rate, or prior agreement with one or more investing parties.

Does the company issue partially amortized loan bonds?

Yes, it is possible to issue bonds that are extinguished every (3) months or (6) months, or by one payment on the maturity date.

What are the risks that may result from investing in bonds issued by the company?

1. Fluctuation of interest rates: The fluctuation of interest rates in the market affects the market price of bonds, as a rise in interest rates is offset by a decrease in the market price of bonds, and a decrease in interest rates is matched by a rise in the market price of bonds.

2. Liquidity: The degree of liquidity enjoyed by loan bonds is affected to a large extent by legislation, laws, and instructions governing the issuance and trading of these bonds and the conditions prevailing in the market.

3. Payment: The company's ability to pay the interest and the nominal value on the due dates depends on the amounts that the company collects on the due dates from the banks that obtained loans from the company to refinance housing loans.

What are the advantages that can be achieved from investing in bonds issued by the company?

1 The bonds are characterized by a low degree of risk equivalent to 20% for the purpose of calculating the bank’s capital adequacy ratio.

2 Improving the bank's liquidity ratio, as the value of the loan bonds issued by the company is considered among the liquid assets for the purposes of calculating the legal liquidity ratio in accordance with the instructions of the Central Bank of Jordan.

3 The ability to trade loan bonds in the capital market through the Securities Depository Center.

Investors' purchase of the company's loan bonds provides an opportunity to contribute to the development of housing finance in Jordan, which is one of the most prominent sectors of the national economy, as the company uses the proceeds of the sale of bonds to provide loans to refinance housing loans to Jordanian banks with the guarantee of mortgage bonds that are duly transferred to the company's order and in loans Refinancing real estate financial leasing contracts for financial leasing companies owned by banks.

Is there trading on bonds issued by the company?

Yes, there is trading and the transfer of ownership takes place through the Securities Depository Center, and trading (ownership transfer in the records of the Securities Depository Center) with these bonds stops before one Gregorian month from the maturity date of these bonds.

What is the main goal that the company seeks to achieve through the issuance?

The company uses the proceeds of selling the bonds, in part or in whole, in granting refinancing loans to banks and financial institutions and/or investing in investment tools available in the low-risk market, according to what is stipulated in the asset and liability management policy and/or paying the loan bonds that are owed by the company.

Who is the target group in the company's publications?

Legal persons, including banks, institutions, financial companies, public institutions, insurance companies and other legal persons.

Does the company obtain the approval of the Securities Commission for its issuances?


What are the methods followed by the company in offering its issues of bonds for subscription?

Through private subscription with special issuance conditions and without preparing a prospectus, provided that the issuance is directed to investors number (30) or less, through public subscription, by preparing a prospectus.

About refinance loans

How do you treat a financial institution's collateral if you take out more than one refinance loan?

The guarantees of the financial institution shall be treated as one unit for the group of refinance loans (that is, the increase in the guarantees of any refinance loan agreement covers the decrease in the guarantees of any loan agreement for the same financial institution) and considering all the guarantees transferred to the company’s favor by the financial institution placed as a guarantee for any loans or obligations on the financial institution .

What is the mechanism by which the refinance loan is withdrawn?

The loan is withdrawn after the borrowing financial institution transfers the required mortgages in accordance with the lending policy approved by the company, or after the financial institution, with the approval of the company, provides temporary guarantees in accordance with what is permitted in the lending policy approved by the company, until the completion of the transfer of the required mortgages, provided that it is completed. Finalizing the transfer of these mortgages within a period not exceeding three months from the date of signing the refinancing loan agreement.

What do the guarantees of refinance loans granted to banks consist of?

The loan guarantees consist of first degree mortgages transferred to the company’s favor and related to refinanced housing loans. In this regard, the bank should provide the company with quarterly reports related to refinanced housing loans, according to the form approved by the company for this purpose, and the bank - in case the percentage of Guarantees for (120%) - To transfer additional first-degree mortgages to the company’s order, or otherwise provide additional temporary guarantees, which are:
1- A mortgage (Jordanian government bonds or treasury bills issued by the Central Bank or bonds issued with a government guarantee or loan bonds issued by the company) in favor of the company.

2- Authorization to Debit the Account of the Financial Institution, which means a written authorization issued by the financial institution to the Central Bank - irrevocable - according to which the financial institution authorizes the Central Bank to debit its account with it, in favor of the company and at its request.

As the company may temporarily accept in any of the following cases:

  Reducing the principal of the housing loan by regular payment or prepayment of any housing loans secured by existing mortgages transferred to the order of the company.
• Failure to pay any refinanced housing loan secured by 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.
• If the bank requests the return of existing mortgages.
• If changes in the interest rate market lead to a reduction in the present value of the outstanding collateral.

How is the value of the refinance loan determined?

1- Loans granted to banks:
The value of the loan is determined by no more than (83%) of the balances of the refinanced housing loans. The loan is granted with the guarantee of first-degree mortgages transferred to the company’s favor, and the remaining value is not less than (120%) of the refinance loan throughout the life of the loan. The company shall submit quarterly reports of the refinanced loans by the company, and the proportion of the refinanced housing loan balances shall not be less than (120%) of the value of the refinance loan.
2- Loans granted to leasing companies:
The value of the loan shall not exceed (80%) of the present value of the balances of the leasing contracts after deducting the total returns charged by the leasing company, and not exceeding (50%) of the credit ceiling of the bank that owns the leasing company. And that the term of the refinance loan that will be granted to the leasing company does not exceed (5) years, and the loan is granted with the guarantee of a first-degree mortgage for the leased real estate according to the principles of leasing according to the company’s favor.

Is it permissible to extend the refinance loan?

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.

What are the conditions and criteria that must be met in housing loans granted by banks in order to be refinanceable?

-    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.

Is it allowed to early repay the principle amount of the loan, or any part of it?

Early repayment of the principle amount of the loan, or any part of it, shall not be permitted without the consent of JMRC.

How to pay off the principal of the refinance loan?

The principal of the loan is paid in one payment on the maturity date, and in special cases, the refinance loan can be repaid periodically as agreed upon.

Does the company charge delay interest on refinance loans?

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 pay to the company the annual interest rate applicable to the loan on the due amounts plus a percentage of (1%) ) per month from the due date until full payment.

How is interest calculated on a refinance loan?

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. 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, taking into account 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).

Can banks obtain a refinance loan with collateral other than mortgages?

The company may grant refinancing loans with “temporary guarantees” according to the following conditions:

a) The borrowing bank shall mortgage the required temporary guarantees within a period not exceeding two weeks from the date of signing the refinancing loan agreement and before withdrawing from the loan. The guarantees that the company accepts on a temporary basis mean (Jordanian government bonds, government-guaranteed bonds, or treasury bills issued by the Central Bank). or loan bonds issued by the company). It is possible - with the company's approval - to accept an authorization from the bank to debit its account with the Central Bank with an amount equivalent to (120%) of the value of the refinancing loan.

b) The Bank shall transfer real estate mortgages that meet the conditions and criteria mentioned in Chapter Four of the approved lending policy, as a security for the granted refinancing loan within a maximum period of (12) months from the date of the refinancing loan agreement. Otherwise, the balance of the loan is considered payable, and the concerned bank is considered in a state of default and prepayment.

How is the interest rate on a refinance loan determined?

The interest rate is determined on the basis of the prevailing return in the local market on company 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.