Govt to provide low-income workers with access to housing
The government is set to roll out a mortgage-linked down payment assistance (BP2BT) program to help low-income informal workers access affordable housing next year.
The aid, backed by a US$215 million loan from the World Bank, will come in the form of a subsidy that will be accessible to beneficiaries that keep their money with a partner bank for half a year.
The Public Works and Public Housing Ministry signed this week agreements with five banks, namely state-owned lenders Bank Tabungan Negara (BTN) and Bank Rakyat Indonesia (BRI), province-owned Bank Pembangunan Daerah Jawa Barat dan Banten (BJB) and PT Bank Pembangunan Daerah Jawa Tengah (BPD Jateng) and private lender Bank Artha Graha, to kick-start the program.
Customers will need to save between Rp 2 million (US$140) and Rp 5 million for six months in these banks to receive verification over mortgage eligibility. After the banks complete the verification process, a special task force in the ministry will determine whether to assist the potential beneficiaries.
“All this time, it has been hard for low-income informal workers to be seen as bankable to banks. The act of saving is a requirement for them to be assessed as to whether they are bankable,” the ministry’s director general for housing finance, Lana Winayanti, said recently.
To access the subsidy for landed houses, customers across the country must have a combined household income of Rp 6 million, with the exception of those in Papua and West Papua, who must earn Rp 6.5 million.
Eligible customers would enjoy a mortgage subsidy ranging from 10 to 40 percent of the house price, which hovers between Rp 130 million and Rp 148.5 million nationwide, except in Papua and West Papua, where the price can reach up to Rp 205 million.
A similar subsidy is also available for flat purchases and home repair. The government would cover up to 25 percent of housing costs for low-income people, while the rest would be sourced from mortgages.
Lana said that, by next year, the ministry would provide 20,500 housing units out of the total target of 125,000 units by 2020 and that it teamed up with banks to identify communities comprising informal workers to funnel the subsidy.
“[The subsidy] is for individuals. But if they are within a community, it would be easier because they could remind each other to make monthly payments,” Lana said.
BRI consumer director Handayani said the lender would “study the pattern” of the new scheme, which is different than the prevailing housing loan liquidity facility (FLPP) scheme, prior to carrying out the program starting at the end of the first quarter of next year.
The FLPP scheme was implemented to help people earning less than Rp 4 million to buy houses. However, it has only been accessed by civil servants, private workers and members of the Indonesian Military and the National Police.
Indonesia, the world’s fourth most populous country with a population of more than 260 million people, has grappled with rising demand for affordable housing, seeing a housing backlog of around 11.4 million at present.
The government launched a program intended to build 1 million houses each year until 2019 to address the issue. However, in the past two years, it failed to meet the target, with 699,000 houses built in 2015 and 800,000 houses built last year. It will likely miss the target again this year, as 765,120 housing units have been built as of early December.