PUTRAJAYA: Some 500, 000 civil servants have yet to own houses based on the number of those who have not taken up government financing for housing, according to the public sector home financing board (LPPSA).
Its chief executive officer Datuk Kamal Mohd Ali said this was probably because some were still new to the service and were waiting to be eligible for government loans.
He said some might also be waiting for their financial standing to be more stable before signing on a long-term financial commitment.
Asked if some civil servants preferred to take up financing with commercial banks, Kamal said “it is their prerogative but it is unthinkable for them to go to commercial (financial institutions) when we offer them interest rates at 4%”.
“However, we are encouraged by the number of housing applications which comes to about 40, 000 yearly.”
Speaking to reporters after the signing of a Memorandum of Understanding (MoU) between LPPSA and Bank Islam and Bank Simpanan Nasional (BSN), Kamal said there were about 800, 000 account holders with the board having disbursed loans totalling RM70bil.
Annually, LPPSA approves housing loans for civil servants in the region of RM10bil and RM20bil, providing more than 100% loans to also include Mortgage Reducing Term Assurance (MRTA) and legal fees.
On the MoU, Kamal said the cooperation with Bank Islam and BSN would allow civil servants to own houses above their eligibility.
“If a civil servant wants to buy a house priced at RM500, 000 and his eligibility for a government loan is RM300, 000, the spouse or children can apply to the two banks for a loan to finance the remaining amount, ” he said.
Bank Islam chief executive officer Mohd Muazzam Mohamed said the bank was pleased to do its part to support civil servants to own houses and had made concessions to its lending requirements under the scheme.
“This will enable civil servants to buy property that they need for their family with the spouse or children getting the remaining amount (of loan) and Bank Islam can finance it, ” he said.
Mohd Muazzam said the bank was ready to accept applications under this programme and had set a target of RM100mil loan disbursement for this year.
BSN CEO Datuk Yunos Abd Ghani said the collaboration with LPPSA would serve as a platform to give civil servants easy access to housing needs.
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