Saudi Arabia is working with the Boston Consulting Group to help start a state-owned mortgage firm similar to the US’s Fannie Mae and Freddie Mac as it seeks to develop a secondary market for home loans, people with knowledge of the plans said.

Public Investment Fund, the kingdom’s sovereign wealth fund, will provide most of the approximately 10 billion riyals (Dh9.79 billion or $2.67 billion) of the institution’s capital, three people said, asking not to be identified because the plans aren’t public. PIF is in the process of selecting an executive to lead the new company, according to two of the people.

Saudi Arabia is seeking to boost home ownership amid one of the world’s lowest mortgage penetration rates. It approved a mortgage law in 2013 and is planning to tax undeveloped land within urban boundaries to boost the availability and affordability of homes. The mortgage law, which has been debated for more than a decade, will overhaul the kingdom’s home-finance market, from registering mortgages to allowing judges to prosecute police officers who fail to carry out eviction orders.

Initially, the Saudi entity will be tiny in comparison with Fannie Mae, which was bailed out by the US in the 2008 financial crisis and has since returned about $142.5 billion to the federal government.

Saudi Arabia’s finance ministry and the wealth fund didn’t respond to calls and e-mails seeking comments. The Boston Consulting Group declined to comment when contacted by Bloomberg.