New PR1MA Scheme Likely To Be Introduced Under Budget 2015 | Those buying homes under the 1Malaysia People Housing Programme (PR1MA) will save money in a scheme to be introduced under Budget 2015.
The scheme, expected to be announced with the Budget tomorrow, will see the Government “subsidising” a portion of the interest rate for the home loans.
Details of the scheme are still being worked out but it will provide some form of financial relief for the buyers, according to sources.
“Based on previous schemes for affordable homes, the Government subsidises up to 2% of the interest incurred and is subject to a minimum rate. There could be a similar incentive for this scheme.
“This is to make it easier for the housebuyers to get approval for the loans and to minimise their hardship in the event of a hike in interest rates,” said one source.
Housing loans now range between 4.39% and 5.85% based on the base lending rate (BLR) of 6.85%.
More than 700,000 Malaysians have expressed interest in PR1MA, with 500,000 affordable homes to be rolled out by 2018 under the Government initiative.
In the Klang Valley, a PR1MA home would be priced between RM350,000 and RM400,000, with prices in a lesser urban area starting from RM100,000.
Introduced in 2011, the programme targets urban areas where an individual or a family earns a combined household income of RM2,500 to RM7,500 monthly.
The scheme is likely part of the rent-to-own (RTO) scheme for prospective house buyers unable to secure housing loans from financial institutions, that was announced last month.
This will enable these Malaysians to each own a house by paying rent on the property for 20 to 30 years, towards eventually owning it.
PR1MA is working with several banks to offer the RTO scheme.
Perbadanan PR1MA Malaysia declined to confirm the scheme but said that it was developing several financial packages.
“An announcement will be made in due course,” the company said in an e-mailed statement.
Many housing industry players praised the plan to give middle-income Malaysians a helping hand with owning a home.
“Housing affordability tops the list of public concerns, more so in urban areas in the Klang Valley,” said one player who declined to be named.
But some were skeptical that it would be helpful to the intended group.
“For a RM400,000 house, the buyer has to fork out at least RM40,000 for the downpayment and the monthly payment will range from RM2,000 to RM2,400 for a 30-year loan period.
“This can eat up a substantial portion of the buyer’s household income, more so with the recent price hikes,” said another industry player who also requested anonymity.
Several potential housebuyers were also skeptical and were worried that the quality of the houses would not be up to the mark.
Others were deterred by the condition that PR1MA house owners cannot sell off the property for at least 10 years - The Star online