RM1bil Fund to Help Spur Home Ownership, Clear Overhang

January 30, 2019

 

Bank Negara Malaysia’s newly launched Fund for Affordable Homes, along with the Home Ownership Campaign (HOC) in March, would help spur buying among first-time home buyers and clear some of the overhang, reported The Sun Daily.

REHDA president Datuk Soam Heng Choon believes the RM1 billion fund would definitely help given the low interest rate, which is capped at 3.5 percent per annum.

“This new fund definitely will be useful in helping first-time home buyers and especially for properties below RM150,000. Of course the question being raised is, are there properties below RM150,000? Definitely there are, even in Selangor there is Rumah Selangorku, where there is a category below RM150,000. Rumah Mampu Milik Johor also has (homes priced RM150,000 and below),” he said.

“Kedah, Perlis, Pahang, Kelantan and Terengganu; these are the states that have different categories of affordable housing. Even in Penang as well. Whether they qualify or not, for the loan, will depend on their ability to repay. That’s why AKPK has also been roped in to ensure financial literacy,” he noted, referring to the Credit Counselling and Debt Management Agency.

Finance Minister Lim Guan Eng, who officiated the launch, revealed that the fund has already attracted 16 applications even prior to its launch, with five already approved and 11 on process.

“If the take-up is good, it can be extended to three years,” he said.

With participating financial institutions including Bank Simpanan Nasional, AmBank, CIMB Bank, RHB Bank and Maybank, the fund will be available for two years beginning 2 January 2019 or until the RM1 billion is fully used up.

With a tenure of 40 years or until the borrower is 70 years of age, whichever is shorter, financing under the fund may be given to single or joint borrowers.

To be eligible, an applicant must be a Malaysian citizen with a maximum household income of RM2,300 per month. The applicant must be self-employed or a salaried worker, with no record of impaired financing for the last 12 months.

Qualified borrowers can only acquire residential properties, either landed, apartments or flats, from the primary market at a price of RM150,000 and below. The borrowers cannot sell the houses within the first five years starting from the date of the last disbursement; otherwise, they will face a 20 percent penalty on the outstanding financing.

 

Image source: The Sun Daily

 

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