1. The terms and phrases used in these Rules shall have the same meanings as those defined in the Real Estate Finance Law and its Implementing Regulations.

2. The following terms and phrases, wherever mentioned in this document,shall have the meanings assigned to them unless the context otherwise requires:

SAMA: The Saudi Central Bank.

Law: The Real Estate Finance Law.

Rules: The Rules Governing Real Estate Refinance Companies.

Real Estate Refinance Company (the Company): A joint stock company licensed to engage in real estate refinance activities.

Real Estate Financier: Commercial banks and finance companies licensed to engage in real estate finance activities.

Real Estate Finance: Extending credit to a borrower to own a dwelling.

Real Estate Finance Contract: A deferred payment contract extended to a borrower to own a dwelling.

Real Estate Finance Contractual Rights Cash flows, mortgages, collaterals and other rights arising under a real estate finance contracts.

Borrower: A natural person who obtains a real estate finance.

Primary Market: Real estate contracts concluded between borrower and real estate financiers.

Secondary Market: Trading of the right of real estate finance entities resulting from primary market contracts.

Real Estate Refinance Activity: The refinancing of real estate financiers and entities engaging in real estate finance activities to provide liquidity and facilitate the trading of real estate contractual rights in capital markets.

Sector: The real estate finance sector.

1. The Company shall be subject to the supervision and control of SAMA in accordance with the Real Estate Finance Law and its Implementing Regulations, the Finance Companies Control Law and its Implementing Regulations, and SAMA’s instructions.

2. The Rules shall apply to companies licensed by SAMA to engage in real estate refinance activity.

3. The Company shall direct its services and products to real estate financiers. The company may, after obtaining a no-objection letter from SAMA, grant finance or purchase finance or acquire finance rights of non-real estate financiers.

The Company shall carry out the trading of real estate contractual rights and facilitate cash flows to real estate financiers to:

• 1. Achieve growth and stability in the secondary market for real estate finance.

• 2. Provide liquidity to the secondary market and provide better access to real estate financiers to finance home ownership for borrowers.

• 3. Increase the liquidity of the real estate finance investments and ensure proper distribution of investment capital allocated for real estate finance among different regions and categories.

• 4. Become an intermediary between the Sector and domestic and foreign financing sources.

1. To achieve its objectives, the Company may:

• a. Acquire, hold and use due payments of any kind of finance obligations and rights related to financed residential real estate.

• b. Issue securities in accordance with the Capital Market Law after obtaining a no-objection letter from SAMA regarding issuance programs.

• c. Provide finance solutions for real estate financiers to finance individual borrowers.

• d. Invest its cash in vault in a manner that enables it to manage its assets and liabilities with the utmost efficiency upon obtaining a no-objection letter from SAMA.

• e. Issue bonds, sukuk, notes, securities, and other debt instruments to meet its objectives upon obtaining a no-objection letter from SAMA.

• f. Carry out any other transactions that serve, complement or support its activities in conformity with its bylaws and after the approval of SAMA

2.The Company may impose charges for its services, in order to cover all costs and expenses of its operations, make fair profits, and ensure being financially self-sufficient. SAMA is authorized to control and restrict the pricing of the services of the Company.

The Company shall not:

1. Provide finance to a real estate financier using real estate finance contractual rights as collateral before making arrangements that ensure that such rights have been transferred to the real estate refinance company as collaterals.

2. Extend real estate finance directly to borrowers.

3. Acquire real estate/non-real estate assets other than those necessary to manage its business unless it has obtained a no-objection letter from SAMA.

4. Undertake partial or complete liquidation of its activity or itself as a whole without obtaining a no-objection letter from SAMA.

1. The Company shall comply with the levels of capital adequacy and liquidity required in accordance with the rules, requirements and criteria stipulated by SAMA, including the following:

• a. Capital adequacy ratio as determined by SAMA.

• b. Leverage ratio as determined by SAMA.

• c. Minimum liquidity ratio to be implemented by the Company.

2. The Company shall not increase nor decrease its capital before obtaining a prior written approval from SAMA.

All members of the board of directors or any of its committees must meet the professional eligibility, and the appointment and ‘fit and proper’ criteria set by SAMA. In particular, the member must:

1. Not combine work in supervising or auditing the Company with being a member in the board of the Company.

2. Not have been dismissed from a leadership or executive position in a financial institution as disciplinary measure.

3. Not be a board member in another real estate financier.

4. Not have been convicted of violating the provisions of any penal law, the Banking Control Law, the Capital Market Law, the Cooperative Insurance Companies Control Law and its regulations, finance laws and their regulations, or any other laws or regulations inside or outside Saudi Arabia.

5. Not have been previously convicted of a breach of trust offense, unless rehabilitated, or unless 10 years have passed since the completion of the sentence and on the condition of obtaining a no-objection letter from SAMA.

6. Have the sufficient solvency, and have not breached any financial obligations towards their creditors nor have given an indication that they are unable to continue to meet their financial obligations towards their creditors.

7. Be informed of laws and instructions relevant to finance and fully versed in the tasks and responsibilities of board members.