Iraq Simplifies Housing Loan Procedures for Public Employees

As part of efforts to expand homeownership opportunities for citizens and activate national initiatives supporting middle- and low-income groups, the Prime Minister of Iraq has directed the relevant authorities to take the necessary steps to implement a proposal to simplify housing loan procedures for government employees.

The proposal, jointly prepared by the Prime Minister's Office, the Central Bank of Iraq (CBI), the Insurance Diwan, and representatives of public and private banks, aims to make it easier for government employees to obtain housing loans by eliminating the requirement for a guarantor when the borrower's salary is domiciled with a bank.

Instead of a guarantor, the proposal introduces an alternative option - an insurance policy against loan default covering the full duration and amount of the loan. This policy will be issued by a licensed insurance company under the supervision of the Iraqi Insurance Bureau and will serve as a substitute for personal guarantees.

This measure is expected to accelerate loan processing, reduce administrative complexities, improve loan portfolio quality, and stimulate growth in the construction and housing sectors. It also aims to strengthen financial inclusion by encouraging citizens to engage with the formal banking system.

The directive aligns with the government's broader objectives to enhance economic stability, stimulate productive and service sectors, and ensure adequate housing for citizens, consistent with the ongoing implementation of Iraq's financial and economic reform programmes.