Govt mulls bank for housing loans

PUTRAJAYA: The government is deliberating a plan to set up a bank that is dedicated to the disbursal of housing loans.Urban Wellbeing, Housing and Local Government Minister Datuk Abdul Rahman Dahlan said the facility would be among several initiatives to help housebuyers to purchase affordable homes.

He said the suggestion to set up a housing bank was brought up during a three-hour meeting of the National Committee of Local Government, which was chaired by Deputy Prime Minister Tan Sri Muhyiddin Yassin.

"It is an idea (the setting up of a housing bank) that the ministry will explore since there have been complaints from loan applicants who could not get funding from commercial banks due to the banks' strict requirements.

"There are quite a number of fiscal policies to comply."

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Loan rejections from financial institutions were reported to be the highest among housebuyers who wanted to purchase homes priced between RM200,001 and RM500,000.

The 70 per cent loan-to-value ratio had been reported to be beyond the capabilities of many housebuyers.

Rahman said a decision on the housing bank could be made fairly soon after the tabling of the 2015 Budget.

He believed that having such a bank would allow faster processing of applications, while providing better focus and more effective housing-risk management.

Another possible option to consider, he said, was to issue the ministry's money lending licences to big insurance companies and cooperatives, so that the latter could provide housing finance.

"We issue between 40 and 50 licences each year and most of them are for personal loans."

Rahman also said the National Committee on Local Government had approved several proposals, including the housing planning guideline.

It would help state and local authorities, technical agencies and housing developers in matters of planning, designing and controlling of all types of properties during the development planning stage, and in the process of applying for a plan's approval.

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Rahman said the committee also approved the ministry's proposal for by-laws to distinguish between a spa centre and a massage parlour. This would provide a standardised definition of spa activities, overcome the inconsistency of licences and correct negative perception about spa centres through effective enforcement.

Rahman said he disagreed with the view that naming a housing project with a non-Bahasa Malaysia name could boost the property's value. "This is not true. The two words in 'Kuala Lumpur' are from the Malay language, and the city is now a sophisticated metropolitan which attracts many visitors."

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