The facilitation of lifelong financing for affordable housing in KSA full paper

1. The facilitation of lifelong financing of the
affordable properties in the Kingdom of Saudi
Arabia
Bhzad Sidawi
Department of Architecture, College of Architecture ad Planning, King
Faisal University
Abstract The demand for affordable housing has largely increased in
the past decades in Saudi Arabia due to the increase of population,
inflation and variation in income levels. Islamic banks and financial
organizations had emerged in Saudi Arabia as early as 1980’s and since
that time they have provided Islamic financing to the prospected home
buyers. The present financing system for buying properties seems
inflexible enough as it does not consider the user’s lifelong preferences
and requirements regarding the property such as: the future physical
alterations or improvements, partial or full transfer of the ownership and
the management of the property. It does not offer the necessary support to
the user to manage the changes that would affect the property during it’s’
lifecycle. These possible changes would have an impact on the property
value and leave the user/ owner unable to do improvements or alterations
or to properly manage or maintain the property. The owner has the right
of getting flexible lifelong financial support and management of the
property. The study argues that initial bank’s support to the buyer to
purchase of the property would not be sustainable unless it considers the
lifelong owner rights. The paper suggests an approach to lifelong
sustainable financing scheme that would support the owner to cope with
possible impacts on the property. This study should motivate banks,
charities, other financing organizations, investors and decision makers to
consider similar approach that provide lifelong financial benefits and
support to the owner.
Keywords: affordable housing, Islamic built law, owner’s lifelong rights, lifelong
sustainable financing, property management, user lifestyle

2. 2
1 Introduction
The demand for affordable housing around the world – in general- and
particularly in Saudi Arabia Kingdom has increased in the past decades due a
number of factors such as: the variation of income levels, the increase of
population who do not have financial resources to buy a property from the
traditional market (Payne 1984). The demand for next few years will increase in
Kingdom of Saudi Arabia, and there is a concern that financial organizations did
not develop yet a feasible strategy and create flexible mechanisms to tackle the
problem. The present provision of funding by banks to prospected affordable
housing buyers consider a number of instant or purchase-moment factors,
meanwhile lifelong factors are not considered and the lifelong financial support
is absent.
The literature review and examination of online documents published by banks’
on their web sites found little evidence that governmental bodies, REDF (Real
Estate Development Fund), or banks support anything other than the purchase of
a property. The lifelong sustainable financial support to the owner is the support
that could meet the payment of the mortgage loan and meet the possible costs of
the following aspects:
 lifelong environmental impacts on the property;
 upgrading the property in response to the climate change;
 lifelong maintenance and management of the property;
 the property’s improvements in regards to user’s lifestyle; and
 transfer of management and control, ownership and use/ utilization rights
Such support would be capable to reserve the value of property if does not
increase it. A survey has been undertaken on bank in Kingdom of Saudi Arabia
to find out the extent of banks’ support to the owner/user at present and their
future plans to provide lifelong support. The paper discusses the survey results
and suggests a methodology that could provide support to the property owner.
Two main themes that would affect the value of the property are discussed;
namely: the user/owner lifestyle; rights and responsibilities, and the
environmental impacts on the property.
This paper highlights the need to incorporate the factors that have a significant
impact on the property lifelong value such as the home owner and property
characteristics in the financing scheme. This may secure the property value
throughout it’s life. The owner characterises can be categorized broadly into: the
style of ownership, use, management; and control. The property characteristics
would include Building quality, adaptability and the energy efficiency. In the
following sections, this paper discusses the importance of various aspects of the
user’s and property characteristics.

3. 2 Impacts on the property value
2.1 The owner/ user rights impact on property value
The ownership and control/ management rights of the home owner in Saudi
Arabia are partially and fragmentally addressed by built laws issued by the
government authorities (e.g. local municipalities). These set general guidelines in
regards to the home owner rights to build a property, to alter his/ her property. It
certifies what designers should do regarding the building setback distances,
distance between properties, block’s height restrictions and so on. It does not –
for instance- define how the property should be designed in regards to the local
lifestyle, traditions and norms or how the user should maintain the property.
These rights have been defined by the Islamic Sharria (Akbar 1992). Akbar
pointed out three broad types of these rights/ responsibilities of an individual (i.e.
the user or the owner), and these are: control and; management, ownership, and
use: this includes right of use and right of benefit.
The above rights can be categorized into one of the following eight categories
(see table 1). The owner of the property may have three rights: ownership,
control and use. He/ she can assign one of these rights to a third party such as the
use or the control. The user may have a control right or control and use rights
together. A third party such as facilities’ management company would have
control right only.
Individual or party
The rights
The owner The user, occupant
or a third party
T h e c o n t r o l l e r /
facilities
manager
1. Ownership, control and
use
X
2. Ownership and control X
3. Ownership and use X
4. Control and use X
5. Ownership only X
6. Control only X
7. Use only X
8. Right of benefit only X
Table 1: The rights of an individual or a party in a property
The property ownership or/and control rights can be transferred partially or
wholly from the original owner to other owners and/or controllers (e.g. property
managers). This possible dynamic and flexible transfer of the property rights
throughout its life would have some consequences on the property value as the

4. 4
responsibility of use, maintenance or control would be exercised by a group of
people or an individual. This implicates responsibility of each one who would
have one of the above rights towards the property in terms what he/she should
do/not do and how it should be done. For instance, the home owner is
responsible to keep up the property in a good condition. In case he/she decides to
alter the property, he should do it without harming his neighbours and violating
their rights1. The user/ occupant is responsible to keep the property tidy and well
maintained and to report any problem to the owner. The property facilities’
manager should keep the property and its systems well maintained.
A number of research studies have highlighted the relation between the user
characteristics, housing design and use and pointed out the importance of
building up a knowledge that would be used in housing design to provide
tailored design solution to people needs, lifestyle and future preferences (Hillier
1984, 1996, Hojrup 2003, Habraken 2003, and Salama 2006). In KSA,
researchers mentioned that non-consideration of user needs such as: the need for
flexibility and adaptability in design has created an uncomfortable environment
to the user (Al-Kurdi 2002, Darweesh 2003). The absence of these aspects has
enforced the owner to carry out a number of changes to their properties which
are sometimes expensive and adapt it to suite the way he/ she would like to live.
Mahmud (2007) suggested that the transformation of properties can be
categorized under the following categories: slight adjustment, addition and
division, total conversion, and reconstruction. He mentioned some of the reasons
for the transformation of a property which would include:
 the adoption of the some of the modern life features by the owner such as the
installation of new kitchen or bathroom;
 the need to achieve a higher degree of privacy for some spaces;
 to adapt the spaces to the owner lifestyle by –for example increasing the
number of rooms or changing the function of some spaces; and
 to use a part of the property for commercial uses to generate an additional
income to support the family.
Therefore, the way that rights, responsibilities and lifestyle exercised by the
owner would affect the property and may bring down it’s value. Sayce (2004) –
for instance- highlighted a number of user characteristics that has an impact on
1
Ahmed and Parry highlighted how an owner/ user right should be practised without
violating the neighbours’ rights. They surveyed the low income housing in Cairo and
noticed that despite some disadvantages that exit in the low-income housing in Cairo,
residents corporate with their neighbours upon making decisions regarding alterations of
their properties or building new blocks. These residents were able to reach to the best
solution that would satisfy everyone. The researchers found that such corporation is
motivated by local people’s beliefs and principals such as ‘No Harm’ principal which is
derived from the Islamic values (Ahmed K G and Parry C M 2001, 2002)

5. the property value such as the impact of the occupier and the occupier’s
satisfaction with the property.
2.2 Environmental and property characteristics impacts on the property’s
value
Environmental impacts are due to the climate change which include rising global
temperatures, rising sea levels and increased frequency and intensity of extreme
weather. Extreme weather and natural disasters are expected to be more frequent
as well. In hot regions such as in KSA, the rise of temperature would enforce
people to use air conditioning more frequently and this would send more gases
into the air, cause more pollution and increase the annual energy bill. In the
future, properties may deteriorate faster and its’ systems may collapse or fail
quicker. The properties will be costive to run if they do not interact naturally
with the environment.
The incorporation of environmental impacts on the property value has been
researched by a number of researchers (Myers et al 2007). Sayce et al (2004)
suggested a link between the property value and sustainability indicators. The
target of this link is to attract several parties such as investors’, authorities and
occupiers attention to the importance of the sustainability and how the abandon
of sustainability would badly affect the property value. She created an appraisal
model that incorporates the sustainability indicators (i.e. building flexibility,
energy efficiency, transport, pollutants, location, occupier, ecology and design)
into calculations of property value. The impact of each indicator on property
value was done through changes in the allowances made for each of the property
appraisal criterions2. By linking each of the sustainability indicators with one or
more of these criterions it is possible to translate the sustainability of a property
into an impact on value (see table 2). She pointed out that a range of
sustainability issues should be considered by the investor or occupier who wishes
to mitigate the risks represented by increasingly stringent environmental
legislation, energy efficiency regulation and transport management policies
operating at local, regional and national levels.
2
Rental growth: the parameters developed for rental growth assume a direct
relationship between rent and occupier costs; any increase in occupier costs will reduce
the amount available for rent
Rental depreciation is commonly used by appraisers to reflect refurbishment costs.
Cashflow: in some instances a sustainability factor may impact directly through the
cashflow. This will normally be due to a requirement for a one off or series of cash
payments to insure against or mitigate a potential risk. Where this is the case, assuming
the cost can be accurately estimated, a figure can simply be deducted from the cashflow at
the appropriate point.
Risk: such as business and investment risk. These criterions are calculated over a
number of years (see Sayce 2003)

6. 6
Sustainability
factor
Conduit (i.e. property appreciable criterion)
Building adaptability Risk premium, cash flow, rental growth, depreciation
Accessibility Rental growth, depreciation
Building quality Cash flow, rental growth, depreciation
Energy efficiency Risk premium, cash flow, rental growth, depreciation
Pollutants Risk premium, cash flow, rental growth, depreciation
Contextual fit Rental growth
Waste and water Cash flow, rental growth, depreciation
Occupier satisfaction Risk premium
Occupier impact Risk premium
TABLE 2: links between sustainability criteria and worth (source: Sayce
2004)
She highlighted that a building that can not be easily adapted to support the
changing needs of its user, compared with other buildings within its class, will
suffer relatively rapid depreciation; as utility falls willingness/ability to pay rent
will also fall. A building that is not sufficiently adaptable for its existing use type
(within use) may be sufficiently adaptable to move to another use (across use)
making it more sustainable than one which can not. In practical terms a building
without sufficient adaptability within use will require sooner - and potentially
more frequent- re-letting and refurbishment, and vice versa. This will reduce
cash flow by increasing voids and refurbishment costs. Increasing an occupants’
degree of control over their environment would increase the level of comfort and
perceived productivity. This increased tolerance, particularly when integrated
with other building fabric design strategies, can enhance the adaptive potential of
a building to climate change (Sayce et al 2004).
On the other hand, properties should be frequently maintained to prolong the life
of the property. Steemers (2003) pointed out that the absence of frequent
maintenance would create a situation where properties are in a desperate need for
maintenance. Struyk (2005) mentioned that a significant share of the housing stock in
Saudi Arabia would need replacement in the next 20–25 years and around 30% requires
improvement in the next 5 years.
As a conclusion, the property value would be affected by the following issues:
a. The owner/ user characteristics: these would include:
 the lifestyle of the owner/ user that affect the way that he/ she uses and
manages the property;

7.  the way the ownership, control and use rights are exercised by a party
or a number of parties and how each party conduct his responsibilities;
 the characteristics of each party that has certain rights in the property;
and
 the transfer of one of the rights to a third party
b. The property characteristics and these would include:
 the adaptability, accessibility, and maintainability degree of the
property
 the building quality of the property
 the sustainability level of the property
3 Research objectives and methodology
The research has a set of objectives and these are:
 to explore characteristics of the existing financing system and how far it
supports the lifelong owner’s lifestyle;
 to find out which of the user lifestyle and environmental issues have
significant impact on the property value;
 to make recommendations to banks and other financial organizations on
how to respond to people needs and aspirations and provides lifelong
support to them
To achieve these objectives, a survey questionnaire and discussion group tools
were used to assess the banks’ level of lifelong support to the user. A
questionnaire survey was used to target 11 Saudi banks and REDF. The
questionnaire was sent to banks in March 2008. Three banks including REDF
responded back. Afterwards, three remainders were sent but without any
response. The researcher contacted local branches of banks in the Eastern region
asking for an interview. After around two weeks, the researcher was able to
interview all real estate managers/ branch managers using the same
questionnaire. Simple statistic methods such as T-test, percentage and mean were
used to analyze the data as the sample number was too small. Bank managers
were invited to the College of Architecture to discuss the results of the
questionnaire and to find out banks’ future plans regarding the owner’s support.
Unfortunately, three banks managers were able to attend and the seminar was
chaired by an expertise in Islamic built laws from the College of architecture.
4 General results
Banks seem to have a very flexible policy regarding the alteration of the property
by the owner as all of them do not mind the owner to carry out any alterations.
Banks were divided over a number of issues regarding the owner rights and these

8. 8
include his/ her right to grant the right of benefit to somebody else, to let the
property or part of it and to use the property for purposes other than residential.
Most banks (i.e. 10 out of 12) have no problem with the owner hiring a third
party to manage the property and they said that he/she has the right to sell the
property provided he/she paid the outstanding mortgage loan. Most of them (10
out of 12) were unhappy about the donation of the property or part of it by the
owner to somebody else and said he/she has no right to do so during the
repayment of the mortgage loan period.
Very few banks agreed to help the owner with transfer of right to benefit to a
third party, and to invest in the property i.e. to use a part of the property for other
uses. Banks were divided over supporting the owner regarding the following
issues: internal alteration, external alteration and management of the property by
third party. Many of them (i.e. 8 banks out of 12) said that they can help - in a
way or another- with transfer of the property to heirs (i.e. family and relatives)
and possible natural disaster. Some banks (i.e. 4- 5 out of 12) were unhappy to
address the following issues in their future plans: to give the borrower more
lifelong advantages and support, to extend the mortgage loan repayment period,
and to support the future needs of the client as such future alterations of the
property. Few banks (i.e. 2 out 12) are unhappy regarding the introduction of
smooth property registration, title transfer and to offer a flexible mortgage loan
package.
Banks were asked about the significance rank of a number of management
and ownership factors to the affordable property value during the repayment
period of the mortgage loan. Banks considered a number of factors would have a
weight above average (i.e. 5) and these are: building adaptability, the owner
occupant daily lifestyle activities, energy efficiency of the property, Internal and
external alterations carried out by the owner to suit his/her lifestyle, maintenance
and management practice style of the property by the owner, building quality and
other criterion (see table 1). Some of these factors (i.e. 5, 7, 11& 12, see table 1)
are found also by Sayce (2003) as significant factors that affect the property
value. It was not obvious at this stage whether and how banks consider these
issues in the initial mortgage scheme, in the re-mortgage scheme or provide other
means of financial support to the owner during the repayment of the mortgage
loan period. During the interviews, banks’ managers mentioned a number of
aspects which would affect the financing of affordable housing in KSA:
 The slowness of REDF procedures;
 Very few and weak links that exist between banks themselves, between
them and Joint-stock, other financial organizations including big
investors; and
 The financial legislations regarding the real estate funding that do not
provide a secure environment to banks to operate

9. 5 Cross tabulation results
In depth analysis (i.e. cross tabulation) has found links between banks
characteristics, their views about user rights and support to the user. Banks which
has high financial activity regarding the lending for property purchase during the
last year said:
 it is the owner right to grant the right of benefit
 to let the property to somebody
 internal alteration expenses can be supported through other/ re-mortgage
loan arrangement
 they are happy to support the future needs of clients
Property characterises and owner’s rights Weighting out of 10
1. Partial transfer of the ownership 0.17
2. The transfer of right to benefit to a third party 2.83
3. Commercial investment in the property by owner (i.e. use part of
the property for other uses such as commercial) 3.00
4. Management of the property by a third party 4.00
5. Building adaptability 5.27
6. The owner occupant daily lifestyle activities 5.33
7. Energy efficiency of the property 5.50
8. Internal alteration carried out by the owner to suit his lifestyle 5.83
9. Maintenance and management practice style of the property by
the owner 5.83
10. External alteration carried out by the owner to suit his lifestyle
(i.e. external extension) 6.36
11. Building quality 7.33
12. Other criterion (i.e. building location, age and area) 8.40
Table 3: The weight of each of property characteristics and owner rights
on the property value during the repayment period of the mortgage loan
(weight above average is in bold)
Banks with high financial activity since the start of their financing scheme
are happy that:
 the owner has the right to grant the right of benefit

10. 10
 internal alteration expenses can be supported through other/ re-mortgage
loan arrangement
 the owner can get financial support to transfer the right of benefit in a way
or another
 the owner who likes to invest in the property, can get financial help
through a re-mortgage loan arrangement
Banks with low financial activity during last year said that it is possible to give
the borrower more lifelong advantages and support
All banks were happy with the following issues:
 to have a very flexible policy towards the alteration of the property
 to help the owner in some way to transfer of the property to heirs
 to help the owner with possible natural disaster
Regardless of their financing history length, banks were divided over the
following issues:
 the owner right to hire a third party to manage the property
 the significance of the maintenance and management practice style carried
out by the owner to the property value
 the building quality significance to the property value
Banks which consider providing financial support to the owner to carry out the
internal alteration said that the internal alteration has a significant weight on the
property value. The analysis of the questionnaire data had produced some useful
results but it raised some questions such as: why some banks are happy with an
issue or they said it is significant to the property value but they do not provide
support to the owner. The following section will discuss such questions with the
banker representatives to find possible explanations.
6 The discussion forum results
Banks’ representatives were invited to discuss the questionnaire results and
whether the factors that affect the property value that found in the initial survey
are really important. The output of the discussion revealed a number of
problematic factors that would affect the lifelong financial support to the home
owner.
The present financial legislations
A bank representative said that opportunities to provide financing in KSA are
low and there is high risk. He proceeds that it is better if the bank work with one
co-operate client and undertakes a low risk and gets less profit than working with
5000 customers and having problems in regards to the payments’ collection. He
regretted that rights of banks are not protected by present legislations. Banks are

11. willing to offer financing but they can not do it without protection. However, the
implementation of the Rahin Aqary (i.e. mortgage regulation system) would
provide protection to banks and regulates the relation between the borrower and
the lender. It would give banks the right to overtake the house if the borrower did
not make payments for a certain period. However, the system may contradict
with the some of the Islamic Shariah clauses which protect the homeowner
unless the system has the power to overcome this issue. This would give banks
bigger willingness to lend buyers because the system is capable to reserve the
banks’ rights. Banks have another problem as there are two systems in KSA; the
Grievance Board or Diwan al-Mazalim and the conventional judicial system and
each of them may give different verdict for the same case.
The Cultural issues
Another representative mentioned some of the cultural characteristics that affect
the lending process to the public. He said:”when the government announced the
property financing system, people imagine that it is free”. The Saudi Society
expects that everything is or should be free. Thus, when banks provide mortgage
loans, people have vague understanding of the mortgage loan terms and
conditions, whether it is free, halal (i.e. not prohibited by Islamic Shariah) or not.
This is why –as another banker said- banks initially went into Ijara scheme as
this would keep the property ownership with the bank.
The level of the financial knowledge of clients
A banker said that the customer should be educated about financing products and
process. He/she should understand he/she is entering into a business transaction
relation. The mortgage loan that the customer gets, will not be subsidized by the
government, it is a loan based on affordability and commitment to pay back.
The shortage of adequate mortgage loan package
One of the bank representatives pointed out that property financing scheme
should not be limited to the appraisal and financing issues but it should be
extended to include the property maintenance which is absent at present due to
the absence of high profile facilities’ management companies. On the other hand,
it is guaranteed that the tenant/ owner of a house/ villa would have full control on
the whole property but in case of a flat, the tenant/ owner would have full control
on the flat but he/she may not have control of the shared parts of the block. Thus,
this would affect the quality of maintenance of the whole block.
The problem of finding and creating Islamic financing mechanism
A banker said that if the bank feels that it needs to produce a new product (i.e.
mortgage loan), it will do it. The bank may have a product which another bank
does not have and does not want to have. It is related to the market demand and
what is offered. Banks has the ability and creativity to create and produce new
and excellent products.
This was rejected by another banker who said that creation of new products in
respect of the Islamic Shariah would be a problem as banks have to develop new

12. 12
Islamic financing mechanisms. When a new Islamic mechanism is created, the
bank compares the effect of the new Islamic mechanism with the conventional
one in order to assess the potential risks. As an example, the bank has created an
Islamic mechanism for selling up a property on paper before construction. The
banker said: “we do it through Ijara Mawsofa Be-Zema which means that the
bank let the property to the client through a letting contract. The bank and client
signs Istisnaa contract in which the client instructs the bank to construct the
building for him/her. The bank instructs a building developer to construct the
building according to the client’s specifications”. Ijara Mawsofa Be-Zema has
its’ risk and the Istisnaa contract as well and these can not be put together back to
back as one contract because each one has its legal liabilities. The client and the
building developer will have no responsibility if any problem regarding the
building quality arises, and the bank will be the only one in trouble. Such
financial arrangement would constitute a high level of risk for the bank.
Therefore, when the bank is engaged in a relationship with a building developer,
the problem is to find the right Islamic mechanism that control such relationship
and provide the right product to the client. Another banker highlighted the
difficulty of the creation of some mortgage products as the government would
consider that it would conflict with the public rights and interest.
The mortgage loan product and lending process risks
One of bank representatives said that one of the issues that will stop the product
from being marketed is to be of a high risk. Banks are concern about risk/ reward
issue so since the bank own the property, it wants to be certain that it’s value will
not decline while it is under it’s custody until it is sold/ handed over to the
customer. At present, Saudi Credit Bureau (Saudi Credit Bureau 2008) have
credit history database for KSA citizens and this can be reached by banks which
incorporate it in pricing and assessing new mortgage loan products which would
reduce potential risks.
The weight of free land provision by government on property value
The discussion forum’s chairman pointed out to the importance of providing free
land plots to the low-income people. He stated that land plots should not be
given to influential individuals; instead the government should give it to highly
qualified giant companies and instruct them to set the infrastructure within an
assigned period. In case that they did not accomplish the work within the period,
the land would be given to somebody else. The land price which includes the
infrastructure costs would be cheaper.
7 Discussion and Conclusion
The study found a number of positive areas regarding the lifelong support of
banks to the owner. Banks seem to have a very flexible policy regarding the
alteration of the property by the owner as all of them do not mind the owner to
carry out any alterations. Most banks have no problem with the owner hiring a
third party to manage the property and they said that he/she has the right to sell

13. the property. Meanwhile, there was no overall agreement by banks regarding the
following owner rights:
 his/her right to grant the right of benefit to somebody else;
 to let the property or part of it and;
 to use the property for purposes other than residential;
Banks were also divided over supporting the owner with the following issues:
 internal alteration;
 external alteration; and
 management of the property by third party
Some banks were unhappy to address the following issues in their future plans:
 to give the borrower more lifelong advantages and support;
 to extend the mortgage loan repayment period; and
 to support the future needs of the client as such future alterations of the
property.
Banks considered that a number of factors would have considerable weight
(above 6 out of 10) on the property value and these are: building quality and
other criterion (i.e. building location, age, area). Banks usually take into account
some of the property and user factors that would affect the property value but the
environmental and lifestyle factors are still absent from their agenda. These
potential factors should be incorporated in the calculation of the property lifelong
value to assure that future financial costs are met as much as possible.
In depth analysis showed that banks with long financing experience are happy to
consider some of the owner’s lifelong rights to support it such as: his/her right to
grant right of benefit and support the transfer of the right, to fund internal
alteration expenses, and support the owner who likes to use the property or part
of it for other uses such as commercial. However, all banks regardless of the
length of their financing experience were divided upon the significance of the
building management, quality and maintenance to the property value. The
interviews and discussion forum found that banks are well aware of the lifelong
needs of clients and they are happy to support some these needs but they are
incapable to do so due to a number of potential factors such as:
 Insecure financial environment including legislations that hinder banks to
operate and flourish as they feel unprotected
 the non-existence of building code that would control the building quality
in KSA;
 the Cultural issues;

14. 14
 the level of the client’s education and knowledge regarding financial
issues;
 the difficulty of finding and creating new Islamic financing mechanisms;
 the financial risk of some of the new mortgage loan products; and
 few and weak links with other financial organizations
Banks can develop new Islamic mortgage loan products such as the Istisnaa in
co-ordination with an expertise in Islamic financing law. On the environmental
side, lifelong financial support should address environmental impacts on the
property and how to meet it. On the owner/user’s lifestyle side, it may include
property development (i.e. design and construction), use/ownership, management
attributes or portions of each according to the client request. Mixing portions of
these attributes such as management and ownership or building development and
management would enable banks to produce multiple and flexible mortgage
packages. Through these packages, the bank would share some of the lifelong
ownership and management responsibilities with the owner.
The government should set clear and well defined financial legislations that
provide a secure financial environment to banks. Banks and the government have
the duty to provide basic financial education to the public. Future research would
investigate the present lifelong relationship between the bank and the owner and
test whether it is the right relationship that is capable to reserve the rights of both
sides while highlighting their responsibilities without contradicting Islamic
Financial laws. There should be also research on new methods that would
provide the lifelong financial support to the owner rather than the existing and
conventional financing ways which may exhaust the low-income owners.
Acknowledgements
The researcher would like to thank all banks and REDF in KSA for their
participation in the survey. Also, special thanks to the Dean and staff of College
of Architecture and Planning, King Faisal University for hosting and supporting
the discussion forum venue.
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Appendix A: Definition of terms

17. Al-Ijara: The bank owns high cost assets and assets that deal with
rapidly changing technology. After purchasing these assets, the bank then
rents them to the customer, giving him an option to either purchase them
during the rent period, or after its completion. It is the most efficient and
flexible way to utilize high cost assets and technology related products.
Al-Istinaa: An agreement suited for construction projects, whereby
the bank signs an agreement with the client for the construction of a site,
or a building, and then signs another agreement with the construction
company responsible for the development plan.
Diwan al-mazalim: A special tribunal that often resolves disputes
between citizens and government officials