Saudi SRC Acquires Mortgage Portfolio from Banque Saudi Fransi in Third Deal

Saudi Arabia’s mortgage-finance market has taken another step toward a deeper secondary-market structure after the Saudi Real Estate Refinance Company (SRC) agreed to acquire a residential mortgage portfolio from Banque Saudi Fransi (BSF).

The Saudi mortgage portfolio acquisition, announced on 5 October 2026, represents the third mortgage-portfolio purchase between SRC and Banque Saudi Fransi. The agreement was concluded under the patronage of Minister of Municipalities and Housing and SRC Chairman Majid bin Abdullah Al-Hogail, with BSF Chairman Mazin bin Abdulrazzaq Al-Romaih present, according to the official Saudi Press Agency announcement.

The transaction is intended to provide liquidity to financing institutions, strengthen their capacity to continue providing residential finance and further develop Saudi Arabia’s secondary mortgage market. The value of the mortgage portfolio was not disclosed in the authoritative announcement reviewed for this article.

SRC–Banque Saudi Fransi Mortgage Deal: Key Facts

The official Saudi Press Agency announcement on the SRC–BSF agreement describes the transaction as part of continuing cooperation intended to improve the efficiency and sustainability of Saudi residential mortgage finance.

What Did SRC and Banque Saudi Fransi Agree?

SRC will acquire an eligible portfolio of residential mortgage financing originated by Banque Saudi Fransi.

This does not mean SRC is purchasing a portfolio of physical houses. It is acquiring mortgage-finance rights associated with residential financing contracts under Saudi Arabia’s regulated refinancing framework.

In practical terms, a bank such as BSF first originates housing finance for qualifying customers. SRC can subsequently acquire qualifying finance portfolios, giving the originating institution additional liquidity and balance-sheet capacity.

That capacity may allow a lender to continue originating residential finance, subject to its credit policies, regulatory capital requirements, customer eligibility and prevailing market conditions.

Saudi Central Bank rules define the primary mortgage market as the market in which financing contracts are created between borrowers and real estate financiers, while the secondary market involves trading rights arising from those primary-market contracts. SAMA also states that real estate refinancing is intended to provide liquidity and facilitate the movement of contractual rights toward capital markets.

Readers researching how mortgages work at consumer level can also see RealEstateSaudi.com’s guide to real estate financing in Saudi Arabia.

Why Is This the Third SRC–BSF Mortgage Portfolio Agreement?

The 2026 transaction follows a relationship between SRC and Banque Saudi Fransi that extends back several years.

In October 2018, SRC announced an agreement with BSF covering long-term fixed-rate mortgage funding as well as SRC's acquisition of part of the bank’s mortgage portfolio. SRC said the portfolio component was designed to increase BSF’s liquidity and support additional home-finance activity.

A second portfolio acquisition followed on 26 September 2021, when SRC agreed to acquire part of BSF’s housing-finance portfolio. Contemporary reporting identified that agreement specifically as SRC’s second housing-finance portfolio purchase from the bank.

The October 2026 agreement therefore represents the third portfolio-purchase transaction in this continuing relationship. The structure and financial terms of the three transactions should not be assumed to be identical, and previously reported portfolio values should not be attributed to the latest deal.

Why Does SRC Buy Mortgage Portfolios from Saudi Banks?

SRC was created to address one of the central structural requirements of a large mortgage market: long-term liquidity.

Mortgage lenders can have capital tied up in financing contracts that may remain outstanding for many years. A specialised refinancing institution can purchase or refinance eligible portfolios, helping lenders manage liquidity and funding requirements.

SAMA's rules expressly provide for real estate refinance companies to facilitate cash flows, support liquidity, promote stability in the secondary market and act as an intermediary between the mortgage-finance sector and domestic or international funding sources.

This model can help connect the mortgage origination process with broader institutional and capital-market funding rather than leaving every long-term mortgage exclusively on the originating lender's balance sheet.

What Is Saudi Arabia's Secondary Mortgage Market?

The distinction between the primary and secondary mortgage markets is fundamental.

In the primary market, banks and licensed finance companies provide residential finance directly to borrowers.

In the secondary market, rights arising from existing mortgage-finance contracts can be acquired, refinanced or ultimately connected with capital-market funding through specialised institutions such as SRC.

A deeper secondary market can potentially help lenders:

• recycle capital and liquidity;

• diversify their funding sources;

• manage long-duration mortgage exposure;

• expand financing capacity;

• transfer eligible mortgage assets within a regulated framework; and

• create a bridge between residential finance and institutional investors.

This secondary-market infrastructure is therefore different from direct homebuyer lending. SRC's regulatory role does not involve directly providing ordinary mortgages to individual borrowers. SAMA's current rules specifically restrict real estate refinance companies from extending real estate finance directly to borrowers.

How Could the Deal Increase Mortgage-Market Liquidity?

Consider a simplified example.

A bank originates a portfolio of residential mortgages. Over time, part of that portfolio meets the eligibility and risk requirements for acquisition by SRC. SRC acquires that portfolio, and the originating institution receives liquidity from the sale.

The lender may then have greater financial flexibility to originate additional financing, manage funding requirements or use the liquidity elsewhere in accordance with its own risk, credit and capital-management policies.

It would be inaccurate, however, to say that every riyal received through a portfolio sale automatically becomes a new mortgage.

The transaction improves the funding mechanism and potential lending capacity; actual new financing remains dependent on credit demand, borrower eligibility, bank policies, regulatory requirements and market conditions.

What the Agreement Means for Saudi Homebuyers

For homebuyers, the significance of the latest Saudi mortgage portfolio acquisition is mainly structural rather than immediate.

A stronger refinancing market may help banks and finance companies maintain access to liquidity and continue providing mortgage products over the long term. A broader funding ecosystem can also make the housing-finance system less dependent on a single source of funding.

However, the SRC–BSF agreement does not by itself guarantee:

• lower mortgage rates;

• approval of a mortgage application;

• lower residential property prices;

• direct government payments to borrowers; or

• cash benefits for existing mortgage customers.

Individual financing conditions remain dependent on the lender, borrower profile, prevailing financing costs and applicable regulations.

For practical buyer-side financing considerations, RealEstateSaudi.com also provides a step-by-step guide to financing property in Saudi Arabia.

SRC's Growing Role in Saudi Housing Finance

SRC was established in 2017 and is owned by Saudi Arabia’s Public Investment Fund. PIF describes SRC as an institution created to develop the Kingdom’s housing-finance market by supporting mortgage originators and increasing secondary-market liquidity.

The Saudi Central Bank licenses and supervises SRC as a real estate refinancing company.

SRC's role has expanded beyond bilateral portfolio acquisitions. Its official corporate information says it acquired residential mortgage portfolios worth approximately SAR 16 billion during 2025, while also advancing securitisation, capital-market funding and the Originate-to-Distribute model.

These figures describe SRC's wider activities and should not be interpreted as the value of the latest BSF transaction.

Mortgage Refinancing, RMBS and Saudi Capital Markets

Portfolio purchases form one part of SRC's wider strategy.

In August 2025, SRC announced Saudi Arabia's first Residential Mortgage-Backed Securities transaction under its local securitisation programme. The initiative was designed to connect residential mortgage assets with a wider institutional investor base while developing a new capital-market asset class.

SRC has also used sukuk markets as part of its funding strategy. In July 2026, the company announced pricing of its third international sukuk issuance, worth $2.75 billion across two tranches.

These developments demonstrate how portfolio acquisitions, refinancing, securitisation and debt-capital-market funding can form different parts of the same broader mortgage-market infrastructure.

There is no authoritative evidence reviewed for this article showing that the newly acquired BSF portfolio itself has already been securitised.

How the Agreement Supports Saudi Vision 2030

The official announcement specifically links the SRC–BSF transaction with the objectives of Saudi Arabia's Housing Program and Vision 2030.

The Housing Program targets a 70% homeownership rate among Saudi families by 2030. Its 2024 annual report showed the ownership rate had reached 65.4% in 2024, compared with a 47% baseline in 2016.

Mortgage-market infrastructure is only one component of achieving these objectives. Housing availability, affordability, residential development, borrower income, financing costs and regulation all matter.

The importance of refinancing is that it supports the financial infrastructure behind housing demand.

For broader context, see RealEstateSaudi.com's analysis of how Vision 2030 is transforming Saudi Arabia's real estate sector.

Why This Deal Matters for Saudi Arabia's Real Estate Market

Mortgage liquidity does not directly construct homes, create new land or guarantee residential price growth.

It can, however, affect the financing environment that supports property purchases.

When lenders have reliable mechanisms for refinancing eligible mortgage portfolios, they may gain greater flexibility in managing balance sheets and funding future housing finance. If this capacity is sustained across the banking system, it could support a more resilient flow of credit into the residential market.

For developers, stable mortgage availability matters because end-user financing can influence the pool of buyers capable of purchasing completed residential units.

For investors, the development of securitisation and the secondary mortgage market is also important because it increasingly links Saudi residential property finance with domestic and international capital markets.

Property-market performance itself must still be evaluated separately. RealEstateSaudi.com's latest Saudi Real Estate Price Index Q2 2026 analysis illustrates why prices, transaction liquidity, new supply and local demand conditions remain separate variables.

Real Estate Saudi Analysis

The significance of the latest SRC–Banque Saudi Fransi deal lies less in the individual portfolio and more in the repetition of the model.

A one-off portfolio purchase can provide liquidity. Repeated transactions between refinance institutions and mortgage originators can potentially create a functioning secondary-market pipeline in which eligible mortgage assets are regularly transferred, refinanced and, where appropriate, connected with capital-market investors.

That could give Saudi banks greater flexibility when managing long-duration housing-finance assets while supporting SRC's ability to aggregate mortgage exposure at institutional scale.

The development of RMBS adds another layer. If Saudi securitisation activity expands over time, mortgages could increasingly move through a chain connecting homebuyers, originating lenders, SRC and long-term investors.

Such a system may improve market depth and resilience, but its effectiveness will depend on asset quality, underwriting standards, regulation, investor appetite, interest-rate conditions and the continued availability of suitable residential finance.

For the physical property market, this is primarily a financial-infrastructure development, not a guarantee of higher house prices or stronger sales. Residential fundamentals—including affordability, supply and city-level demand—remain decisive. This is particularly relevant in fast-changing markets such as the Riyadh real estate market.

What Happens Next?

Market participants should watch for additional SRC portfolio acquisitions, refinancing partnerships and official disclosures concerning the scale of future transactions.

Further development of the Kingdom's RMBS and securitisation market will also be important, particularly if institutional participation expands.

Saudi Central Bank data on new residential financing, mortgage volumes and contracts will provide a clearer indication of how housing-finance activity develops alongside these structural changes.

For the current transaction, however, the confirmed facts remain straightforward: SRC has agreed to acquire another residential mortgage portfolio from Banque Saudi Fransi, the transaction is the third between the parties, and no official portfolio value has been publicly disclosed.