Slow start for Youth Housing Scheme

PETALING JAYA: Bank Simpanan Nasional (BSN) has approved only 225 loans for the Youth Housing Scheme out of some 500 applications received since the soft launch in July 2015 due to several reasons, including inability to repay loans and incomplete documents, said BSN chief executive Datuk Adinan Maning.
“As agreed and supported by the government, the scheme operates fully on a commercial basis and loans are processed and approved according to the existing BSN guidelines. In turn, these guidelines are based on Bank Negara Malaysia (BNM) guidelines which stress on the buyer’s ability to afford buying the property, to ensure the customer’s ability to service and repay the loan,” he told SunBiz recently.
“In addition to the affordability issue, we also found cases of incomplete documents and applicants not meeting the criteria of the scheme. There were also cases where successful customers have rejected the loan offer due to offers from other banks,” he said.
Adinan advised interested applicants to firstly, confirm eligibility by referring to the scheme’s terms and conditions and secondly, to prepare the necessary documents and records for submission.
“All this will help to ensure that their applications can be processed as fast as possible by BSN,” he said.
Despite many cases of home buyers facing difficulties in obtaining home loans due to BNM’s strict lending guidelines, the Youth Housing Scheme has only received 500 applications.
“The scheme underwent a soft launch in July 2015 and was given due publicity via BSN’s website and social media. In addition, our mortgage sales agency force who are located across the nation have increased the momentum to market this scheme.
“Nevertheless given the festivities which have taken place since then, for example, Ramadan and the ensuing Hari Raya Aidilfitri, the Merdeka Day and Hari Malaysia celebrations, potential buyers might have waited till these were over. To date, and in the last two months, BSN has received around 500 applications which, given the strict eligibility criteria, can be considered encouraging,” said Adinan.
He said the take-up rate is based on many factors, including the above-mentioned seasonal holidays.
“Notwithstanding the scheme doesn’t distinguish potential buyers by the type of property purchase but rather on their eligibility and it is on first come first serve basis. In addition, BSN has partnered with 886 developers to promote the scheme. These developers have projects located across Malaysia therefore enabling all those that qualify to purchase their first house anywhere in Malaysia,” he added.
Adinan said the scheme will continue to be marketed via BSN branches nationwide, the BSN website (myBSN), BSN i-Poster/Interactive Media Display, BSN ePortal, BSN ATM screens and social media including Facebook and Twitter.
Officially launched on Oct 1, the scheme was announced under Budget 2015 and is a partnership among the government, BSN, Cagamas Bhd and the Employees Provident Fund. It is for married youths aged between 25 and 40, with a combined household income of no more than RM10,000, who are looking to buy their first home. The scheme is limited to 20,000 applicants or valid for two years, whichever comes first.
As at Sept 21, 225 loans with a total value of RM57.5 million have been approved. BSN aims to hit the RM1 billion mark by year-end.
BSN is the sole bank appointed to execute the scheme. It will provide home loans ranging from RM100,000 to RM500,000 with a tenure of up to 35 years or the age of 65, whichever is earlier.
Both conventional and Islamic home loans are available, with financing margin of up to 100% of the purchase price. Successful applicants receive additional financing up to 5% of the purchase price for the cost of Mortgage Reducing Term Assurance or Mortgage Reducing Term Takaful.
Under the scheme, the government will provide further aid with monthly disbursements of RM200 for the first two years from the first disbursement. There is a 50% stamp duty exemption on the sale and purchase agreement as well as facility legal documents.
Deputy Finance Minister Datuk Chua Tee Yong is expected to announce updates on the scheme today.