Under Construction Property Home Loans in UAE

The UAE, owing to its rapid economic growth, has also witnessed an increase in the construction of properties for various purposes. This has also enhanced the availability of residential properties, which has been accompanied by numerous financial institutions providing home loans in the country. 

At the same time, individuals may also prefer to purchase an under-construction property, whether due to high costs of ready-made properties or for future planning. However, contrary to popular opinion, several banks and loan providers offer under-construction property home loans in UAE.

Continue reading below to find out all the relevant details about under-construction property home loans in UAE as well as the top providers for the same.

Top 5 Under Construction Home Loan Providers in the UAE

Let’s have a look at the top 5 banks and financial institutions providing home loans for under-construction properties in the UAE and their notable features and terms:

1. Ajman Bank

Ajman Bank provides under-construction property home loans in two primary variants. The applicant here can opt for self–construction or construction through a developer/builder. 

Features and Benefits of Under-Construction Property Home Loan by Ajman Bank

• An amount of up to AED 8 million can be obtained with this home loan in UAE
• The maximum repayment tenure for this loan is 25 years (including the construction period)
• If a developer is involved in the construction of your home, the approved list of developers and projects is as follows:
  • Real Estate Investment Public Corporation- Flamingo Villas
  • Meydan Shobha
  • AI Zorah – Golf Villas
  • Manazel Real Estate
  • Aldar/Sourdough
  • Emaar Properties
  • Charlestates - Jasmine Residential Complex and so on
• Up to 50% of the value of the property can be financed (down payment of 50%)
• Life Takaful (insurance) free for the entire term of this under-construction property home loan
• These transactions can be completed with this under-construction home loan by Ajman Bank:
  • Finance for the construction of a new property (New Purchase)
  • Transferring existing home loan to Ajman bank (Standalone Payout)
  • Purchasing property via the secondary market, with the bank taking over the seller's mortgage from another bank or financial institution. (Seller Buyout)
• Finance is available for both the freehold properties and non-freehold properties
  • Freehold properties - Properties that developers/sellers give to buyers (such as UAE nationals and expatriates) while granting them the rights to own them. The government approves specific locations for freehold properties.   
  • Non-freehold properties -  These properties, unlike the freehold ones, can only be purchased by UAE nationals and GCC nationals (in specific areas).
• Financing available only for UAE nationals and resident-expatriates
• Quick approvals that generally take around 48- 72 hours 
• The major types of construction finance plans provided under Forward Ijarah are as follows: 
  • Istisna Purchase: Here, the customer is appointed by the bank as its contractor for the construction of the property. The progressive payments will be released upon the certification of completion. Once the property is completed, the bank will lease the property to the customer for Ijarah payments. It must be kept in mind that the bank’s approval is necessary for making any alterations to the approved construction plan here.  
  • SPA: In case a customer wishes to purchase the property with no down payment, the bank will sign the SPA (Sales & Purchase Agreement) directly with the developer. Initially, the customer will make a down payment to the developer followed by bank payments until the property is handed over.
  • Tripartite Agreement : In case a customer has made a down payment (or any other payment related to the property) to the developer, the customer can surrender their rights to the property through a tripartite agreement here. In this option, the developer will register the bank as the new owner, and the progressive payments (after the down payment is made by the customer) will be completed directly to the developer until the property handover.  

Eligibility Criteria for Ajman Bank Under-Construction Property Home Loans

Given below are the general eligibility requirements for Ajman Bank home loans

*Varies depending on several other factors 

Documents Required to Apply for Ajman Bank Under-Construction Property Home Loans

1. Completed application form
2. Bank statements for the previous six months
3. Salary certificate
4. Trade licence copy (for self-employed individuals)
5. Audited financial statements for self-employed applicants
6. Relevant property papers
7. Any of these - valid passport, UAE national ID, Khulasat al Khaid copy, or valid Visa

Fees and Charges of Under-Construction Home Loans by Ajman Bank

The general structure of fees followed by Ajman Bank for its home loans is as follows:

2. Abu Dhabi Islamic Bank (ADIB)

ADIB offers two under-construction home loan plans titled:

• Finance Against Property
• Build Your Dream Home

The Abu Dhabi Islamic Bank works with the following developers:

1. Sorouh Real Estate
2. Manazel Real Estate
3. Aldar Properties
4. Burooj Properties
5. Bani Yas Real Estate
6. Bloom Real Estate
7. Tourism Development and Investment Company
8. Emaar Properties
9. Nakheel Properties
10. Dubai Properties

1. Finance Against Property

This plan allows individuals to transfer their home loans from other institutions for pre-owned land for construction and renovation purposes to the ADIB.

Features and Benefits of ADIB Finance Against Property 

1. Available only for UAE nationals and UAE resident-expatriates
2. Maximum loan amount of AED 10 million for UAE nationals and AED 15 million for UAE ex-pats (up to 80% of the property value financed)
3. Affordable profit rates that start at 3.99% per annum
4. No early settlement fees applicable when selling the property
5. Shariah structure followed as per Istisna for under-construction home loan

In the Istisna type of financing, the borrower is responsible for the construction of the property. This property is undertaken by the bank, which will transfer it to the borrower after the construction is completed. 

1. The borrower will get up to six months of the optional grace period. (Optional)
2. Property Takaful insurance is covered by Abu Dhabi National Takaful Company and will pay by Abu Dhabi Islamic Bank for the full tenure.
3. Once opted for 'Finance against property', the borrower will automatically upgrade to ADIB Gold Priority Banking status for salary transfer customers.

2. Build Your Dream Home by ADIB

This type of home loan can be obtained for pre-owned property or land as well as purchasing other property, construction, or even renovation of the home. 

Features and Benefits of Build Your Dream Home by ADIB 

1. Up to AED 10 million loan amount (up to 85% of the property value)
2. Profit rates starting as low as 4.75% per annum
3. No early settlement fee applicable at the time of selling the property
4. Up to 6 months’ optional grace period
5. Property insurance for the complete tenure (fees borne by the bank)

Eligibility Criteria for Under-Construction Home Loans by ADIB Bank

Listed below are the eligibility criteria for both 'Finance Against Property' and 'Build Your Dream Home’ plans by ADIB: 

Documents Required for Under-Construction Property Home Loans by ADIB

1. Resident Visa copy
2. Emirates ID
3. Valid Passport
4. Khulasat Al Qaid (the family book) – only for UAE nationals
5. Income proof (like salary certificate) for salaried individuals
6. Documents related to the ownership of the firm for self-employed individuals
7. Bank statements (generally for the previous 3 months)
8. Liability letter (if needed) 
9. Property documents

Fees and Charges for ADIB Under-Construction Home Loan 

3. Emirates Islamic Bank

Emirates Islamic Bank provides the plan ‘Home Finance- Bina’s' to help individuals seeking to construct or buy a home. Once completed, the bank leases the home to the borrower under the agreed repayment tenure. 

For this under-construction property home loan, the Shariah principle of ‘Ijarah' is followed.

Features and Benefits of Under-Construction Property Home Loans by Emirates Islamic Bank 

1. The bank finances up to 85% of the current value of property
2. The loan can be repaid in tenure of up to 25 years 
3. Easy monthly repayments on variable interest rates as directed by the EIB
4. Takaful coverage provided to protect the family of the borrower from unforeseen events 
5. Life Takaful and property Takaful collected along with home finance instalments
6. Project monitoring services and engineering services available at no additional cost
7. This under-construction property home loan is available on granted land with the first and second rank mortgages:

• First rank mortgages - Sharjah Housing Programme
• Second rank mortgages - Mohammed Bin Rashid Establishment

 

Documents Required to Apply for Under-Construction Home Loans by Emirates Islamic Bank

Bina'a Finance (Salaried UAE Nationals)

• Original and a copy of valid Passport 
• A copy of the "Khulasat Al Qaid" or the National ID 
• Original salary certificate (not more than 45 days old) that contains information regarding the length of employment, current designation, income, and so on
• Emirates Islamic Salary Transfer Letter that contains information related to the length of service, current designation, salary
• Bank statements that show the salary credits for the previous 6 months
• Liability letter from the bank to which your salary is transferred (less than 30 days old)

Note: Original documents containing property details will also be required, such as:

• Quote or offer letter from the seller
• Agreement of sale and purchase
• Title deed/Mulkia and site plan
• Copy of valid facility approval [for the Sheikh Zayed Housing Program (SZHP) and the Mohammad Bin Rashid Housing Establishment (MBRHE)]

 

Additional Documents and Details to be Provided

1. Down Payment proof 
2. Property specifications
3. Statement of cash flow 
4. Schedule of work
5. Building permit
6. Demarcation certificate
7. Undertaking of retention board 
8. Bank guarantee or performance bond
9. Owner share completion (if valid)
10.  Trade licence copies of consultant or contractor
11.  Authorised drawing
12.  Bill of quantity that has the signature of all the parties

Note: If a contractor is involved, they must open an account with the Emirates Islamic Bank.

Fees and Charges for Emirates Islamic Bank Under-Construction Home Loan 

4. Standard Chartered Bank

Standard Chartered Bank offers under-construction home loans to UAE residents at competitive interest rates. Its home loans can be availed for both completed and under-construction properties as per the approved list of the bank.

Features and Benefits of Under-Construction Home Loans by Standard Chartered Bank

• High financing amount of up to AED 18 million 
• Easy loan repayment in a tenure up to 25 years
• Minimal paperwork and quick approval 
• No life insurance required

Notably, by availing yourself of this home loan, you can also get access to a Standard Chartered current account with which you can enjoy priority banking account benefits, zero minimum balance requirements, the assistance of a dedicated relationship manager, high cash withdrawal limits (for free) with a Platinum debit card, and more 

Eligibility Criteria for Standard Chartered Under-Construction Home Loan

• Age: The applicant must be at least 21 years at the time of application
• Salary requirements: The applicant must have a minimum monthly income of AED 15,000 to be considered eligible

Documents Required for Standard Chartered Bank Under-Construction Home Loan

Given below is a general list of documents required for this Standard Chartered under-construction home loan in the UAE:

1. Copy of valid Passport
2. Copy of Emirates ID
3. Salary slips 
4. Title deed
5. Liability letter
6. Memorandum of Understanding
7. Sale purchase agreement
8. Oqood and developer request

For self-employed applicants -

• Trade Licence
• Share certificate
• Audited financials for the last two years

Fees and Charges of Standard Chartered Bank  Under-Construction Home Loan 

Top Banks Providing Under-Construction Property Home Loans in UAE

Listed below are the applicable interest/profit rates for the discussed under-construction property home loans in the UAE:

How to Apply for Under-Construction Home Loans in UAE?

You can complete all the steps related to buying under-construction home loans in the UAE – exploring, comparing, purchasing – and much more from Paisabazaar UAE. The process is fairly simple, as you would need to visit paisabazaar.ae and head to the ‘home loans’ section under the ‘banking products’ category. 

Once you are on the home loans page, you can fill out the lead form present there and get access to the best home loan plans. You can then examine the plans and compare them as per their feature, and apply for any one of them as per your requirements.

Applying for a home loan with paisabazaar.ae is highly convenient and beneficial, as you can get the best deals on the top loan plans, which you can compare easily on our platform. We are also there if you need any assistance related to your loan plan – our customer service and finance experts’ team are available round-the-clock to resolve your queries! 

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