KUALA LUMPUR: Applicants of 1Malaysia People’s Housing Programme (PR1MA) who want to use their savings in Account 2 of their Employee Provident Fund (EPF) are being advised to weigh their options carefully.
EPF chief executive officer Datuk Shahril Ridza Ridzuan (pic) said members opting for the scheme to buy their first home would have their savings in Account 2 “ring-fenced” to help them settle their loans in a timely manner.
This measure, he said, would be an assurance for banks to provide a higher margin of home financing.
“The prospective applicants need to understand the economic choices they are making because they will be trading off the long term ability to access Account 2 for other things for a short-term ability to purchase a house,” he said.
When tabling the 2017 budget, Prime Minister Datuk Seri Najib Tun Razak announced the step-up end-financing scheme for PR1MA which aims to make home financing easier and more accessible to the buyers.
The scheme is a collaboration between the Government, Bank Negara Malaysia, the EPF and four local banks – Maybank, CIMB, RHB and AmBank.
But as applicants’ incomes improve over time, Shahril said, they might have the option to refinance the loan to release the “ring-fence” on Account 2 so they could use it for other purposes.
Normally, besides housing, EPF members have the option to make withdrawals from Account 2 to finance education, medical treatment and to perform the Haj.
Shahril said EPF was finalising the scheme with partner banks to be able to implement it from Jan 1.
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