Thursday 28 Mar 2024
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This article first appeared in The Edge Financial Daily on November 21, 2018

KUALA LUMPUR: Housing and Local Government Minister Zuraida Kamaruddin supports FundMyHome as an option that makes it easier for first-time buyers to purchase a home.

In Dewan Rakyat on Monday, Zuraida said those who may benefit from the programme are individuals who can afford a house but do not have a regular income, as well as those without bank accounts — these could affect one’s ability to obtain a mortgage.

“This (FundMyHome) is a method that will make it easier for them to purchase houses. It is applicable for unsold and up-and-coming units,” she said when presenting her winding-up speech on Budget 2019.

Developed by EdgeProp Sdn Bhd, FundMyHome requires a first-time homebuyer to pay a 20% deposit for a 20% equity in the house that he or she is buying. The remaining 80% will be raised from and owned by participating financial institutions or investors. After five years, the homeowner can choose to buy the remaining 80% or opt out by selling the home and getting a share of the proceeds.

Zuraida said FundMyHome “is a programme that provides equity to purchasers” unlike renting. “The 20% deposit will still belong to the purchaser at the end of the first five years, unlike renting whereby the money for your [rental] payment gets depleted,” she added.

As an example, Zuraida cites a homebuyer paying a mortgage for five years could lose all the money paid, as well as the home, if the person is no longer able to continue paying that mortgage.

“When you can’t afford to buy the house, you leave the property and lose your [money paid across five years]. In this case, if you want to pull out [after five years], you can get back your money [from the sale proceeds],” she said. “As a minister, I find this method very interesting. For them (first-time buyers) to acquire a house is now achievable.”

Zuraida said the government is also in discussions with Bank Negara Malaysia for a “top-up fund” programme, proposing that loans for a 10% housing deposit be charged an interest rate of 2% for a 15-year period.

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