Announced in Budget 2019 by the Ministry of Housing and Local Government (KPKT), FundMyHome + DepositKu scheme is a pilot scheme which aims to increase homeownership among the B40 group.
In case you’re wondering, B40 is a term used for income categorisation in Malaysia. It stands for “Bottom 40%” of the country’s population, which refers to all citizens who earns a monthly household income of RM3,000 or less.
For all B40 citizens who might be incapable of affording a new property, KPKT launched FundMyHome + DepositKu to fund for their property purchase with no repayments required.
Now, let’s dive deeper into what FundMyHome is about.
What Is FundMyHome?
In essence, FundMyHome is quite similar to the act of property crowdfunding. Instead of getting a typical home loan from a bank, you’ll be getting funds from different investors.
These investors are basically institutional funders who will legally own part of your house, but it wouldn’t be much different if you’re getting a loan from a bank.
How FundMyHome Works
When you purchase a property under FundMyHome, you’ll only pay 20% of its value upfront, while the remaining 80% will be covered by your investors in return for a fair share of any future profits.
For example, the house you’re purchasing costs RM450,000. Under FundMyHome, you’ll only need to come up with RM90,000, and your investors will pay for the remaining RM360,000.
As it’ll be a one-time payment, there will be no monthly repayments required.
You and your investors will be tied to that house for 5 years, after which you can decide if you want to keep it or sell it.
How Do I Get To The Investors?
You don’t need to search for these investors yourself.
By browsing the official site of FundMyHome, you’ll be able to see a long list of housing options funded by investors. These options may be labelled with either “fully funded” or “funding in progress”:
- “Fully funded” means that the home has enough funding from investors, and buyers just need to commit to the balance.
- “Funding in progress” means that contributions from investors are still ongoing, and there isn’t enough funding for buyers to purchase it yet.
Am I Eligible For FundMyHome?
You can only buy a house under FundMyHome if you’re:
- A Malaysian citizen
- 18 years old and above
- A first-time homebuyer
- A non-bankrupt
Can’t afford the 20% Upfront Payment? DepositKu Is Here To Help.
If you’re eligible, you can get a government loan of up to RM30,000 under the DepositKu scheme. This loan can be paid back after 5 years.
For example, if the house you want costs RM307,000. You’ll need to pay 20% of the house upfront under FundMyHome:
RM307,000 x 20% = RM61,400
DepositKu approves you for a loan of RM30,000, so you’ll only need to pay:
RM61,400 – RM30,000 = RM31,400
What Are My Obligations As A Buyer Under FundMyHome?
Once you become a homeowner under FundMyHome, you’ll have to take care of the property and pay for all the things whichever a homeowner should be responsible for.
This include things like management fees, quit rent, and any repair or maintenance cost. You can also renovate the property if you wish, but the costs will be borne by you.
What Happens When You’re Near The End Of Your Ownership Period?
6 months before your 5th ownership year is up, you’ll need to have an independent property valuation done at your cost.
FundMyHome will appoint a property valuer and you’ll have 2 months to schedule a house inspection for valuation.
When everything is done, you’ll have to make a decision of whether you want to keep the house or sell it in the open market for a share of the proceedings.
(A) Keep Your Property Ownership
If you wish to keep it, you’ll need to buy out the 80% share that’s being held by your investors, either through your own funds or a bank loan.
Alternatively, you can choose to refinance the property via FundMyHome.
(B) Selling The House
If you decide to sell the house, the procedure that follows will be administered by FundMyHome.
The property will be available for sale in the open market for a minimum of 3 months, and it would usually take about 3 to 6 months for a property to be sold.
Any furnishing and fittings provided by the developer remains within the property and will be included as part of the deal, and those that you own can be excluded if you wish.
You’ll have to vacate the property once it’s past the 5th year of ownership, or you’ll have to pay rent if you’re prolonging your stay.
What Are The Benefits Of FundMyHome?
Unlike a traditional bank loan, you won’t need to pay any monthly payments – at least for the first 5 years.
Since you don’t need to make loan repayments during that time period, you can use the money you would’ve spent on it to beef up your savings, or other financial plans.
You can also choose to rent out the house and get passive income, however it’s subject to terms and conditions by FundMyHome.
If you’ve managed to find yourself a tenant, do remember that your tenancy agreements can’t go beyond the 5th anniversary of the purchase of the home.
After 5 years, you may sell the house and withdraw your investment, with any additional profits that you might get from the sale to find another property you like better.
What Happens If FundMyHome Is Abolished In The Future?
While this is extremely unlikely, you and your investors are protected by property agreements that fall under the purview of Malaysian law.
Things will proceed as normal. You can continue living there for the duration of 5 years, and when the time comes, you can either sell the property or buy out the investors’ property share.
We hope this article is helpful for you in understanding the concept of FundMyHome + DepositKu scheme.
If this is your first time buying a property, our guide on buying a new house will help you through the process.
Disclaimer: The information is provided for general information only. PropertyGuru International (Malaysia) Sdn Bhd makes no representations or warranties in relation to the information, including but not limited to any representation or warranty as to the fitness for any particular purpose of the information to the fullest extent permitted by law. While every effort has been made to ensure that the information provided in this article is accurate, reliable, and complete as of the time of writing, the information provided in this article should not be relied upon to make any financial, investment, real estate or legal decisions. Additionally, the information should not substitute advice from a trained professional who can take into account your personal facts and circumstances, and we accept no liability if you use the information to form decisions.