Some al­ready li­censed to give loans

The Sun (Malaysia) - - NEWS WITH­OUT BOR­DERS -

The min­istry will also en­sure the pro­vi­sions un­der the Act are not mis­used,” he said.

Deputy Prime Min­is­ter Datuk Seri Ah­mad Zahid Hamidi had in­structed Noh to brief the Cab­i­net on the ini­tia­tive af­ter Noh last Thurs­day an­nounced the ini­tia­tive to let el­i­gi­ble de­vel­op­ers pro­vide hous­ing loans of up to 100% to prop­erty buy­ers, fol­low­ing dif­fi­cul­ties faced by buy­ers in se­cur­ing bank loans.

The pro­posal, how­ever, was re­ceived with strong op­po­si­tion by many, in­clud­ing Fi­nance Min­is­ter II Datuk Jo­hari Ab­dul Ghani who said the idea was il­log­i­cal and un­sus­tain­able.

Noh said the idea was not new, and se­lected de­vel­op­ers were al­ready li­censed to of­fer the loans.

Un­der the ini­tia­tive, de­vel­op­ers will have to ap­ply for mon­eylend­ing li­cences is­sued by the min­istry un­der the Moneylen­ders Act 1951 (Amend­ment) 2011, which would al­low them to of­fer loans at an in­ter­est rate of 12% with col­lat­eral and 18% with­out col­lat­eral.

The Real Es­tate and Hous­ing De­vel­op­ers As­so­ci­a­tion Malaysia (Re­hda) said it is propos­ing prop­erty de­vel­op­ers with money lend­ing li­cences only of­fer “bridger” loans, which are capped at in­ter­est rates be­low 10%.

Re­hda pres­i­dent Datuk Seri Fateh Iskan­dar Mo­hamed Man­sor said such loans would only be of­fered to home buy­ers who have se­cured loans from banks but were un­able to ob­tain the de­sired mar­gin of fi­nanc­ing.

“Based on feed­back from buy­ers, most banks are giv­ing 75% to 80%.”

Re­hda said the in­ter­est on such “bridger” loans will not be in the teens and pro­posed to cap the in­ter­est rate at 2% above cost of fund­ing.

“We have cost of funds, so we are look­ing at any­thing that is rea­son­able, 2% above our cost.

“We have cost and risk. This is some­thing we are still talk­ing about and wait­ing for feed­back,” said Fateh Iskan­dar, adding that the scheme must be re­al­is­tic and sus­tain­able.

Re­hda also pro­posed to limit the loans to first-time house buy­ers who are buy­ing homes priced RM500,000 and be­low.

Fateh Iskan­dar said the scheme def­i­nitely has risks and only de­vel­op­ers with healthy bal­ance sheets would par­tic­i­pate.

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