FOR many Malaysians, owning a dream home is essential to care for and raise their family.
As a manager and father of two, Amirul Manan, 29, sees owning a home as the foundation for building strong roots.
"It gives hope that a person can buy his dream home within his income capacity, irrespective of race," shares Amirul, noting how the Housing Credit Guarantee Scheme (HCGS) offers peace of mind with its extensive coverage.
First established in 2007 under Syarikat Jaminan Kredit Perumahan Bhd (SJKP) – a company wholly owned by the Minister of Finance (Incorporated) – the scheme was created to help those with fixed and non- fixed incomes, such as freelancers, the self-employed, e-hailing drivers and petty traders, secure financing to purchase their first dream home.
Under the Madani Government, the SJKP guarantee scheme allocation has doubled to RM20bil, easing financial stress for up to 80,000 first-time buyers. For instance, SJKP guarantee values for Bumiputera recipients rose from RM2bil in 2022 to RM18bil during 2023–2025, while figures for Indian recipients grew from RM0.2bil in 2022 to RM2.7bil over the same period.
Beyond flexible joint and two-generation financing, the scheme requires applicants to meet key criteria:
> Applicant eligibility: Open to Malaysian citizens aged 18 and above with fixed or non-fixed incomes;
> Property use: Applies to first-time buyers purchasing a residential property (new, sub-sale, or auction) for self-occupancy;
> Financial capacity: Total loan repayments must not exceed 65% of the applicant’s gross monthly income, with Central Credit Reference Information System (CCRIS) arrears limited to no more than two months within a 12-month period and no adverse credit records within the last 24 months.
Sustainable homeownership
Weighing in on these positive developments, National House Buyers Association (HBA) honorary secretary-general Datuk Chang Kim Loong commends the Madani Government’s visionary commitment to empowering Malaysian families through the expanded Housing Credit Guarantee Scheme (HCGS).
Chang views the SJKP guarantee allocation as a useful and compassionate financial bridge, particularly for gig economy workers, freelancers and small traders who often face barriers under traditional bank lending criteria, such as not having fixed salary slips.
"The HCGS serves as a vital lifeline for first-time buyers who have the income capacity to service a loan but lack sufficient upfront cash," shares Chang.
He observes that by covering additional entry costs such as legal and valuation fees, the scheme meaningfully lowers initial financial hurdles for young families.
To further maximise the scheme’s real-world impact, Chang constructively advocates extending its benefits to the secondary sub-sale property market.
"Allowing loan guarantees for sub-sale or second-hand homes protects buyers who prefer avoiding the risk of delayed or abandoned new projects," he explains.
While praising the initiative's inclusive intent, he offers a thoughtful distinction between expanding credit access and ensuring true long-term housing affordability.
He emphasises that loan guarantees must be matched with prudent financial planning so that homeownership remains a sustainable joy rather than a financial burden.
Credit guarantees make financing accessible, but buyers must always borrow responsibly and strictly within their actual means," Chang notes.
Touching on intergenerational financing models, he constructively advises that housing commitments are best anchored in a buyer’s independent economic capacity to safeguard both young earners and retiring parents.
To complement targeted financing schemes like the HCGS, Chang envisions a forward-looking housing ecosystem where credit support operates hand-in-hand with progressive safeguards like the Build-Then-Sell (BTS 10:90) model.
Under this ideal framework, buyers enjoy accessible credit through SJKP guarantees while remaining fully protected against project delays or developer non-performance.
"The ultimate objective must be twofold: making loans accessible while ensuring that homes remain genuinely affordable and quality-built," Chang points out.
For genuine long-term buyer protection, Chang maintains that Malaysia ultimately needs a multi-pronged approach – combining targeted credit guarantees and genuinely affordable housing with stronger developer screening, effective enforcement against errant developers, structured Rent-to-Own options and a decisive transition towards the Build-Then-Sell (BTS 10:90) model.
Real Estate and Housing Developers’ Association (REHDA) Malaysia president Datuk Zaini Yusoff also lauded the SJKP for addressing critical entry barriers for first-time homebuyers.
"SJKP is a scheme that should be lauded by industry players, as it is testament to the Government's commitment to ensure that more Malaysians are able to own homes.
“Providing up to 100% coverage will definitely benefit young individuals or families who are struggling to meet the minimum 10% downpayment and are not prepared to fork out additional costs such as legal fees and Memorandum of Transfer (MOT).”
He explains, “While the scheme is not specifically limited to those in the B40 or M40 groups – given that its monthly income eligibility is a maximum of RM11,000 per person – the 100% coverage is capped at homes priced at RM360,000, which usually targets buyers from these two groups. This proves that the scheme is meant to mainly attract lower income earners as a way to encourage them to own homes, as per the national homeownership agenda.”
He adds: “As developers, we are open to any initiatives that would assist Malaysians to own their dream homes. We believe that schemes similar to SJKP should be more common and accessible for all.
“Build-then-sell is already an option for developers to undertake, although admittedly at a lower rate than the sell-then-build system as it can only be implemented by developers of significant financial ability.
“Rent-to-own, on the other hand, may be helpful to assist more rakyat to buy homes similar to SJKP, although we strongly recommend would-be purchasers to understand the financial requirements and finer details with the relevant financial institutions.”
He emphasises that REHDA would continue to encourage its members to uphold their nation-building role of providing quality, affordable homes for the rakyat in a timely and sustainable manner.
Expert insights
Economist and Center for Market Education (CME) chief executive officer Dr Carmelo Ferlito views the HCGS under SJKP as a fairer, needs-based framework because it assists Malaysians according to their economic circumstances rather than ethnic background.
Ferlito says the scheme can remove a genuine financing obstacle faced by gig workers, traders and other self-employed Malaysians whose incomes may be sufficient but difficult to demonstrate through conventional salary documentation.
“A policy based on economic circumstances rather than ethnicity is generally fairer and more consistent with a market economy. Assistance should respond to identifiable disadvantages, such as low or irregular income, limited savings and difficulty documenting earnings,” he says.
He also considers SJKP preferable to direct government construction, allocation or lending because it operates through existing financial institutions and allows households to choose among market-supplied properties.
“Government guarantees, when properly priced and limited, can be less distortionary than direct state lending or production. However, eligibility should not be confused with affordability. A household may qualify for a guarantee but still be unable to sustain the monthly repayments,” he cautions.
Ferlito stresses that a mortgage is both an asset and a long-term liability. Easier access to homeownership may support wealth accumulation, but it can also increase household indebtedness and expose lower-income families to unemployment, interest-rate changes, falling property prices and negative equity.
“The objective should be social mobility, not simply a higher homeownership statistic. Economic stability comes from sustainable income growth, savings, employment opportunities and manageable debt – not ownership alone,” he says.
He therefore sees targeted credit guarantees as one limited component of housing policy, particularly for creditworthy borrowers who lack conventional documentation or collateral. “They should not be used to turn households with weak repayment capacity into homeowners or to transfer excessive risk from banks to taxpayers.”
In the longer term, Ferlito argues that housing affordability also requires supply-side reforms, including simpler approvals, lower regulatory costs, greater competition among developers and more flexibility in housing type, size and location. “Renting near employment, education and transport may sometimes provide greater mobility than purchasing a cheaper home far from economic opportunities,” he adds.
