PETALING JAYA: Bank Negara is setting up a RM1bil Fund for Affordable Homes to help home buyers from the lower income group nationwide to finance the purchase of their first homes.

The fund will be available for two years from Jan 2, 2019 or until the fund is fully utilised, according to a Bank Negara statement.

Eligible home buyers could obtain financing (conventional or Islamic) at a concessionary rate at participating financial institutions, namely AmBank, Bank Simpanan Nasional, CIMB Bank, Maybank and RHB Bank.

Financing rates will be as low as 3.5%.

The fund is for Malaysian citizens with maximum monthly household income of RM2,300 buying properties priced up to RM150,000, Bank Negara said.

“Owning a home is a major investment or commitment for many people. It is therefore important for prospective home buyers to assess their ability to meet the financial commitments associated with owning a home, including mortgage repayments and other related expenses.”

Bank Negara said an easy and convenient online financial education module will be provided by Agensi Kaunseling dan Pengurusan Kredit (AKPK) for those applying for financing under the Fund.

The launch of the fund, Bank Negara said, is complemented with a broader range of measures to assist buyers with monthly income of RM5,000 and below, to purchase their first home priced up to RM300,000.

These measures which apply to eligible home financing from all financial institutions are aimed at lowering the ancillary costs of home ownership for qualified borrowers and include stamp duty exemption, affordable rates for mortgage protection cover and waivers on the legal fees on sales and purchase and financing agreements.

Still on the subject of housing, earlier among other measures for the housing sector, Finance Minister Lim Guan Eng said to reduce the huge number of unsold completed houses, a national Home Ownership Campaign is being proposed.

He is proposing a stamp duty exemption of these overhang units on transfer instruments for units priced between RM300,001 to RM1mil effective for six months from Jan 1, 2019 for first time buyers.

Lik said the overhang is valued at RM22bil as at March 31, 2018 from RM13.3bil a year ago. Because of the lending conditions in the country, and in order to help house buyers, Lim said the government will allocate RM25mil to Cagamas Bhd to provide mortgage guarantees to enable borrowers to obtain higher financing from financial institutions, inclusive of down payment support.

This will be for first-time home-buyers with household income of RM5,000 or less.

These measures are expected to give between 7% and 11% cost savings to buyers, before taking into consideration any promotional discounts which may be offered by the property developers.