KUALA LUMPUR: Finance Minister Lim Guan Eng today launched Bank Negara Malaysia’s (BNM) RM1 billion Fund for Affordable Homes, to help buyers from the lower income group finance the purchase of their first homes.
The fund, which was announced in the 2019 Budget, will be available for two years from Jan 2, or until the fund is fully utilised.
Eligible home buyers can obtain financing – conventional or Islamic – at a concessionary rate at participating financial institutions, namely AmBank, Bank Simpanan Nasional, CIMB Bank, Maybank and RHB Bank.
Financing rates will be as low as 3.5%.
The fund is for citizens with a maximum monthly household income of RM2,300 looking to buy properties priced up to RM150,000.
Also present at the launch today were Deputy Finance Minister Amiruddin Hamzah, Housing and Local Government Minister Zuraida Kamaruddin, Bank Negara governor Nor Shamsiah Yunus and other central bank leaders.
In a press conference later, Lim said there had been 16 applications for the fund since it was opened on Jan 2. Five have been approved while the rest are being processed.
When asked whether there was a market for houses priced below RM150,000, Zuraida said such homes were in areas outside of main towns such as Alor Setar, Kedah, and Seberang Perai, Penang.
Lim meanwhile said there was a long waiting list for such homes but buyers could not secure loans.
“This makes it very hard for the federal and state governments to continue building houses, because they cannot get back the money from building these homes,” the Bagan MP said.
On why those from the lower income bracket were finding it difficult to obtain loans, Lim said they did not fulfil lending requirements.
“We ask the banks whether they can loosen lending rules, but at the same time BNM has its guidelines.
“So we are looking for a compromise. BNM came up with this scheme to at least help fulfil expectations and help these buyers get loans which they could not get in the past.
“There are many who cannot get loans,” he added. “We’re looking at a 70% rejection rate.”
If the scheme is unable to help everyone, he said, he hoped they would be able to think of other alternatives.
“There are other creative ideas to fund the purchase of houses, for instance the peer-to-peer funding framework.
“We have to continuously think of creative solutions. If there is a last mile problem, we will try to address it.
“This is a last mile problem. They have done everything right, it is just their repayment abilities which don’t fulfil benchmarks and the requirements.”
On whether there were plans to increase the allocation, Lim said the question was not the amount but rather whether there would be an extension of time.
“It is not easy to lend out RM1 billion,” he said. “If the take-up rate is good, we may extend it to three years.”
Zuraida meanwhile said the fund was meant to educate first-time home buyers, which was where the Credit Management and Counselling Agency (AKPK) came in.
“We have AKPK educating the Bottom 40 (B40) group on how to manage their finances so that they can make it a habit to manage money well.
“At the end of the day, we may not need to pump in more money. The B40 group needs to work hard and make sure they comply with the terms,” she said.
AKPK introduced a simple online financial education module on its portal Rumahku in November last year.
The module helps potential borrowers understand and manage their finances effectively through a simple self-evaluation by giving them an idea of the financial commitment they will face once they have secured the loan to buy their house.
Meanwhile, in an immediate response, Real Estate and Housing Developers Association Malaysia president Soam Heng Choon welcomed the setting up of the fund.
The issue being raised, he said, was whether there are properties priced below RM150,000.
“There are such houses, especially in Selangor, like Rumahku Selangorku, and the affordable housing schemes in Johor, Kedah, Perlis, Pahang, Kelantan, Terengganu and even Penang.
“Whether the house buyers qualify for the loan will depend on their ability to pay it back. This is why AKPK is stepping in, in the area of financial literacy.”
He said he believed the scheme would help due to the lower interest rate of 3.5%.
“In tandem with the housing ministry campaign coming up, and that the finance minister has mentioned stamp duty waivers, we hope this package will help spur the industry a bit more, given that it has been quiet for a while now.” - FMT
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