This study was planned as an effort to assess the impact of the Real Estate Development Fund (REDF) program on housing development in Saudi Arabia and to ascertain the actual physical and social conditions on which the occupants' perceptions, assessments and housing needs were based. The primary method employed to gather the information was a structured interview of a sample of 109 residents drawn by a systematic sampling design from two major cities, Medina and Dammam. The interviews were supplemented by objective information obtained through site observation and review of documents, as well as personal interviews with government officials and practitioner personnel. The findings revealed a general consensus of satisfaction with residential environments among the overwhelming majority of the respondents despite the presence of adverse environmental conditions or inadequate neighborhood services. This may suggest that environmental satisfaction, in particular, satisfaction with the dwelling, can be significantly enhanced by policies which allow people to participate in the selection of their residential environment as well as its planning. The study strongly recommended the continuation of the funding program as the best means of helping provide for future housing needs along with several incentives to be provided for the purchase as well as maintenance of the existing housing stock. However, certain measures should be taken, aimed at increasing building performance and design livability which may include a closer supervision from REDF and other responsible agencies.