Pracha Rat housing criteria loosened

The cabinet yesterday approved easing the criteria of the Pracha Rat housing programme to make it more attractive to prospective homebuyers after the previous criteria failed to lure low-income earners and state officials.

According to Kobsak Phutrakul, assistant minister to the Prime Minister’s Office, the scheme was active for a year, but only 258 million baht worth of pre-financing loans were approved to three property developers out of a 30-billion-baht total loan package.

There were also just 36 applications for the post-financing scheme, with 13,631 qualified homebuyers allotted 11.3 billion baht out of a 40-billion-baht total lending package.

Mr Kobsak said t here were 388 applications from state officials for the Treasury Department’s low-cost housing programme.

The eased requirements include allowing buyers who have no current housing ownership to take part in the scheme. Land prices will be excluded, and participants can borrow up to 1.5 million baht to finance construction of their residence.

Under the previous requirements, participants must never have had any housing ownership, while land prices and construction costs were included in the housing loans, which were capped at 1.5 million baht.

For similar housing projects developed on Treasury Department lands, short-term leases will be allowed for state officials who earn monthly salary not exceeding 20,000 baht. For a long-term leasehold, any homeowners will be eligible.

The cabinet on March 22 approved a lowcost government housing scheme worth 70 billion baht under the Pracha Rat (People’s State) initiative.

The government has tasked GH Bank, the Government Savings Bank (GSB) and Krungthai Bank (KTB) with providing loans both for buyers and property developers participating in the scheme.

First-time buyers (including state officials) who are self-employed or otherwise earn a low or uncertain income will be eligible to participate.

The value of the low-cost homes, including the land on which they are built, must not exceed 1.5 million baht per unit.

Under the scheme’s regulations, 40 billion baht will be slated for post-financing, with the remaining 30 billion for pre-financing.

The GSB and GH Bank will take charge of post-financing for participating tenants and buyers, with the banks each lending 20 billion baht.

For pre-financing, the GSB, GH Bank and KTB will act as lenders.

With 40 billion baht allocated for postfinancing, those who buy or lease homes priced 700,000 baht and under will pay 3,000 baht in monthly instalments for the first three years, 4,000 from the fourth to the sixth years and 4,500 for the remaining term.