RM10bil home loans disbursed to civil servants
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PUTRAJAYA: The Public Sector Home Financing Board (LPSSA), which was established in January 2016, has been disbursing RM9bil to RM10bil housing loans annually to public sector employees.
LPSSA chief executive officer Datuk Kamal Mohd Ali said that LPSSA has been receiving about 48,000 applications every year, with a “very low” rejection rate.
“This is because we directly deduct monthly salaries to service the housing loans.
“Additionally, we had increased the deduction to 80% of the applicant’s salary compared to 60% previously,” he told reporters at a memorandum of understanding (MoU) signing ceremony between LPSSA and MBSB Bank Bhd yesterday.
Both LPSSA and MBSB are teaming up to provide a joint financial scheme for public sector employees to buy their first home.
The partnership is to offer joint mortgages for households that have both civil servants and private sector staff to buy a house together.
The scheme allows spouses or parents and children to apply for a joint loan to purchase a house, provided at least one of the joint applicants is a public sector employee.
“It is the first time LPPSA is collaborating with a commercial bank such as MBSB for civil servant housing loans.
“We hope that the scheme will be ready within this year. We are now working on the details,” Kamal said.
Under the MoU, LPPSA and MBSB Bank will offer two loan categories for the scheme – financing for completed houses and houses under construction. MBSB plans to disburse about RM500mil loans under the scheme spanning over three years.
“We could increase the loan amount depending on the demand and performance,” said MBSB president and chief executive officer Datuk Seri Ahmad Zaini Othman.
Under the planned scheme, LPPSA would be providing loans for civil servants, while MBSB would finance the differential amount to the joint applicants who work in the private sector.
“This means that if the price of the house is RM300,000 and the amount approved by LPPSA is about RM250,000, the applicant, who is working in the private sector can apply for the difference from MBSB,” Zaini said.
“The scheme is to help borrowers, especially civil servants, get higher loans compared to individual applications, giving them the chance to own more comfortable homes,” he added.
LPPSA is a statutory body under the Home Financing Board Act 2015, established in January 2016 to approve civil service loans with a flat 4% interest rate.
“There are a lot of households where the husband or wife is working in the public sector, while their spouse is working at the private sector, so we can’t give them a full loan under LPSSA.
“So, we hope that this collaboration with MBSB would help these households buy a better house together,” Kamal said.