Bank Negara launches RM1bil fund for B40 to buy house

KUALA LUMPUR: Bank Negara Malaysia has launched a RM1 billion fund for affordable home ownership for those earning RM2,300 and below.

Finance Minister Lim Guan Eng said the fund would be fully utilised for homes under RM150,000 each in smaller cities nationwide.

“We will work with Bank Negara in order to enable the B40 income group to afford their own homes under the new scheme and will fully utilise it until it reaches RM1 billion,” Lim said during the lauch at Sasana Kijang here today.

“The new scheme is expected to benefit first time home owners who, otherwise, would not be able to afford a home due to financial constraints and loan eligibility. Banks such as Ambank, Bank Simpanan Nasional, CIMB Bank, Maybank and RHB Bank will be providing the financing at a lower rate of 3.5 per cent,” he added.

Bank Negara governor Datuk Nor Shamsiah Mohd Yunus said the new incentive will enable house owners to have lower monthly installments by 23 per cent compared to the existing funds.

“The fund will be offered for two years beginning January 2 through five financial institutions and will lower monthly installments by 23 per cent.

“However, the Affordable Homes Fund should be viewed as a temporary measure offered for a limited time only as it provides low financing rate compared to other financing product.”

She added that in order to ensure home financing remains robust, financing rates must reflect the real risks faced by the financial institutions taking into account the fund and administration costs, as well as liquidity and credit risks.

Under the fund, the overall borrowing costs are further reduced through down paymetn support, affordable mortgage protection rates, waiver of financing application processing fee and stamp duty exemption by the Inland Revenue Board.

Prospective buyers can access the portal called “Rumahku” at the Agensi Kaunseling dan Pregurusan Kredit (AKPK) website to undergo the self-assessment online portal and apply for the financing.

To date, 16 applications have been received with five approved and 11 under processing.

Shamsiah reminded prospective buyers to have sufficient savings while ensuring their payment capability remain intact throughout the loan tenure.

The fund is open to landed, flats and apartment property types priced at RM150,000 and below for the tenure of 40 years or a maximum age of 70 years, whichever is shorter.

Borrowers are not allowed to sell the homes within the first five years from teh date of the last disbursement or a penalty of 2 per cent on the outstanding financing will be imposed by the financial institutions to the borrowers.