SHAH ALAM (Sept 21): The Selangor Government is currently in talks with Bank Negara Malaysia and commercial banks to loosen the requirements for loan approvals for first-time home buyers under the Rumah Selangorku affordable housing scheme, said its Executive Councillor for Housing and Urban Living Haniza Mohamed Talha.

Haniza said many people wishing to buy houses under the scheme could not get sufficient loans to finance the purchase, especially in the case of households earning less than RM5,000 a month.

“We are aware of  Bank Negara's measures to tighten housing mortgage policy after taking into account the statistics of household debt which have reached a critical level.

“However, in this regard, the State Government has appealed to the Federal government that Bank Negara can differentiate between debt due to retail consumption such as credit cards, personal loans, education loans and vehicle loans aside from debt for home ownership,” she said when opening the Bumiputera Property Exposition 2018 organised by the Real Estate and Housing Developers' Association Malaysia (REHDA).

She said there needs to be distinction between the different types of loans because loans for housing financing is an asset that will increase in value over time through capital appreciation. Hence, she said the banks need not worry about loss of asset value.

Haniza added that the State Government is coming up with a proposal to assist first-time home buyers by providing collateral to the bank as security for giving out the loans.

“One way that we are working on is that the government provides collateral to the bank so that the banks feel safe to give out 100% loans. We are still in discussion with the banks right now and if implemented, I see that this will reduce the stock of unsold homes and increase the number of home owners,” she told reporters at a press conference after the opening ceremony.

“There will be a certain amount of money, for example, 10% of the selling price of the unit being parked at the bank by the State Government.

“We focus on first-time home buyers because we want to make sure that more people with income less than RM5,000 who have no home can have a home,” she added.

Haniza disclosed that the State Government has shortlisted two banks that are willing to participate in the scheme, and is now checking to see which of the two banks can offer a better deal.

“We really hope after this there will be a lot more people that will be eligible and be able to own (Rumah Selangorku) units. Also I hope that after this, more banks will offer the same service,” she said, adding that a confirmed policy will be announced in the middle of October.

The Rumah Selangorku scheme is an initiative by the Selangor Government that started in 2014. As of July 2018, a total of 54 affordable housing projects involving 28,639 residential units have been built and occupied, exceeding its target of 15,000 units set for 2015 until 2018.

Haniza said the new target for the State Government is 30,000 units of affordable housing to be achieved over the next five years.