Dar Al Tamleek

Creating New Housing Finance Services for Saudi Arabia Consumers

As our experience with Guidance Residential matured in the largest and most sophisticated market in the world, we began looking for opportunities to expand our housing finance business into other markets where Muslim consumers were underserved. Our ongoing researched identified several opportunities. We next chose to extend our U.S. knowledge into the heart of Islamic life, Saudi Arabia.

Saudi Arabia enjoys a large and thriving economy, is reasonably wealthy and characterized by an expanding middle class. Our research showed that their rate of home ownership was growing but that the local mortgage industry was still in a nascent stage. Residential mortgages were difficult to obtain. The market was substantially underserved.

Because no secondary mortgage market existed, we needed to develop a large balance sheet for our new company to meet financing needs. We created the idea for the company, wrote the business plan, developed the products and raised money from prominent Saudi investors, including GOSI, an arm of the Saudi Government. We wrote the code for a sophisticated technology platform that allows online pre-approval of a mortgage application within seconds and final approval within 48 hours after the receipt of required documentation. Such speed was unheard of in the country, where approvals typically took weeks or months.

Dar Al Tamleek has been an unqualified success. After less than three years of operations, it achieved the leading share of the Saudi mortgage market and won numerous local and regional awards for the quality of its customer service and products. After the company was operating, Dar Al Tamleek was appointed as the exclusive representative of the Saudi Public Pension Agency’s Masakin program, which seeks to encourage home ownership among government employees. In the first three months of the program, we created more mortgages for government employees than had been issued in the previous three years.

This is the largest such employer program in the Kingdom. In addition, the Public Pension Agency has become an investor in Dar Al Tamleek. We continue to explore other prospects for expanding Guidance’s consumer and housing finance expertise in order to meet the needs of consumers in underserved markets and create investment opportunities for institutional investors.