‘Keep RTO scheme for buyers of cheaper homes’

THOSE who are able to afford RM500,000 houses should not be given aid from the Rent-To-Own (RTO) financing scheme, said state housing and local government committee chairman Jagdeep Singh Deo.

He said although the state welcomed the RM10bil allocation under the RTO scheme announced in Budget 2020, he did not agree with the eligibility conditions set under the scheme.

“To me, those who need this aid should be the people who cannot even afford low-cost houses ranging from RM42,000 to RM72,500.

“This needs to be the priority because in Penang, affordable houses do not even reach RM300,000. So extending it to houses worth RM500,000 does not make sense.

“To us, those who already can afford RM500,000 houses should not be aided,” he said during a press conference after launching the World Planning Day celebrations near Summer Place condominiums .

It was earlier reported that the Federal Government would work with financial institutions to implement RTOs to help those who are unable to afford the initial 10% deposit to buy their homes.

“Through this scheme, for the purchase of the first home of up to RM500,000, financing of up to RM10bil will be provided by the financial institutions with support from the government via a 30% or RM3bil guarantee,” Finance Minister Lim Guan Eng was quoted while tabling Budget 2020.

Jagdeep, however, said the state government was willing to compromise.

“We can agree to developers with houses selling up to RM150,000, as this would mean buyers are paying RM500 a month.

“But for those who are paying up to RM2,000 a month under the RTO scheme for a loan of RM500,000 over 20 years, it just does not make sense as RTO scheme is supposed to help those who are unable to secure a loan to buy homes,” he added.

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