Bank Negara's RM1b fund to help B40 M'sians own their first home

Bank Negara Malaysia has launched an RM1 billion fund aimed at helping low-income Malaysians obtain loans to purchase their first home.

Under the “Fund for Affordable Homes” scheme, Malaysians with a household monthly income of RM2,300 and below are eligible for loans with a financing rate capped at 3.5 percent per annum for residential properties priced RM150,000 and below.

The five participating banks are AmBank, Bank Simpanan Nasional, CIMB, Maybank and RHB.

Speaking at the launch today, Finance Minister Lim Guan Eng said the fund, which was included in his Budget 2019 speech last November, is expected to last two years.

“I hope that this RM1 billion fund for homebuyers will help reduce our affordable housing problem - whereby housing is built by the state or federal government, but can’t be sold.

“This is not because there are no buyers, but because they (buyers) struggle to obtain loans [...] We hope this will help solve this problem.

“If it doesn’t, it is back to the drawing board to think of a further (sic) formula to solve this problem,” he said during his speech at BNM’s Sasana Kijang centre in Kuala Lumpur today.

At a press conference afterwards, Lim revealed that 16 people have applied for the fund since it went online on Jan 2, of which five have been approved and the remaining are under consideration.

Also present was Housing and Local Government Minister Zuraida Kamaruddin, who said there were properties priced RM150,000 and below in smaller towns in the country.

“It would be areas that (are) a bit out of the main towns like Alor Setar and small towns like Seberang Perai in Penang. Places like these have have homes priced as such,” she said when asked.

Mandatory financial education

Fund applicants will need to undergo and pass an online financial education moduleconducted by the central bank's Credit Counselling and Debt Management Agency (AKPK) before they are eligible.

During the launch, BNM governor Shamsiah Yunus said this requirement was aimed at raising financial literacy among low-income households.

She also urged the public to view the fund, with its low financing rate, as a “temporary convenience”.

“This fund, with its low financing rate, should be seen as a temporary convenience which is only for a limited term.

“To ensure that home financing is sustainable, financing rates need to reflect the actual risk faced by financial institutions, taking into account the cost of funds, administrative costs, liquidity risks and loan lending,” she stressed. -Mkini