Government sets RM1billion target for home-financing

The Government is targeting RM1 billion worth of home-financing to be disbursed to some 20,000 variable income earners this year, Second Finance Minister Tan Sri Nor Mohamed Yakcop said yesterday.

The financing comes under a scheme announced in the 2008 Budget, where the government will provide a RM50 million guarantee fund to financial institutions that offer this loan.

Currently, two banks namely Bank Islam and Bank Simpanan Nasional have signed agreements with the Finance Ministry's wholly-owned subsidiary Syarikat Jaminan Kredit Perumahan Bhd (SJKP).

Nor Mohamed said depending on the smooth implementation of this scheme, other banks are expected to come on board in the later part of the year and the guarantee fund will likely be increased.

"There is no limit (to the fund) when it comes to ensuring that all eligible applicants will get the financing," he said.

Nor Mohamed said this to reporters after launching the scheme and witnessing the signing of the agreements between SJKP and the two banks in Putrajaya yesterday.

The Skim Pembiayaan Perumahan Rakyat is targeted at the self-employed, particularly those in agriculture and fishing sectors who have the ability to service the loans but unable to provide proof of income streams.

No guarantor is needed, said Nor Mohamed, as the government wants to make the application process as simple as possible.

"We are confident that many people are qualified for this scheme and will apply," he added.

A statement released by the two banks said the loans will be structured to offer flexible repayment terms with a payback period of up to 40 years or up to age 65.

It will be base financing rate plus zero per cent with financing amount set at a minimum of RM25,000 and a maximum of RM60,000 for completed residential property or those under construction.

Each application will be processed and approved within two weeks, said Nor Mohamed, adding that only those that are creditworthy will get the financing.

Updating on the response to the monthly withdrawal of the balance in Employees Provident Fund for mortgage repayment which took effect January 1, the minister said it has been encouraging.

In the first two weeks of this month, about 2,114 applications have been received and from this amount, 1,713 were approved involving a total withdrawal amount of RM29 million.

By New Straits Times (by Roziana Hamsawi)