Are You Eligible For An Affordable Housing Scheme?
Adapted from https://www.imoney.my/articles/affordable-housing-schemes
Written by Jen-Li Lim
Home prices have surged over the past few years, but our incomes are not keeping up. Saving up for a down payment for a home can take years, while paying off a mortgage for a home that’s beyond your affordability can be a struggle.
One way to ease the burden can be through an affordable housing scheme. These schemes either offer low- and medium-cost housing solutions or financing to help you cover upfront housing costs.
But which schemes are you eligible for? Here’s your guide to affordable housing schemes in Malaysia.
List of affordable housing schemes in Malaysia
Here’s a summary of the schemes available:
| Scheme | Assistance type | Eligible properties | Income eligibility |
|---|---|---|---|
| Perumahan Rakyat 1 Malaysia | Affordable housing, financing up to 110% | RM100,000 to RM400,000 | RM2,500 to RM15,000 |
| My First Home Scheme | Financing up to 110% | Maximum RM500,000 | Single applicants: RM5,000
Joint applicants: RM5,001 to RM10,000 (max RM5,000 per applicant) |
| BSN MyHome (Program Perumahan Rakyat) | Financing up to 100% | Loan amount from RM25,000 up to RM300,000 | Minimum RM1,000 |
| My Selangor Home | Affordable housing | RM42,000 to RM250,000 | RM3,000 to RM10,000 |
| Residensi Wilayah | Affordable housing | RM52,000 to RM300,000 | Single applicants: RM10,000
Joint applicants: RM15,000 |
| Perumahan Penjawat Awam Malaysia | Affordable housing for civil servants | RM90,000 to RM300,000 | Not stated |
Perumahan Rakyat 1 Malaysia (PR1MA)
PR1MA aims to provide “affordable and high-quality homes inspired by modern living concepts for middle-income Malaysians”. Its homes come in a variety of unit sizes and types, including apartments and terraces. They are priced between RM100,000 and RM400,000.
Eligible buyers can get financing of up to 110% of the Sales and Purchase (SPA) price with participating banks. It also has an upcoming rent-to-own scheme, which is expected to launch in June 2021.
To apply, you can register an account at the PR1MA website.
Eligible applicants:
- Malaysian citizen
- Single or married, age 21 and above
- Individual or combined gross monthly household income (husband and wife) of between RM2,500 and RM15,000
- A PR1MA home can only be purchased as your first or second home
My First Home Scheme
The My First Home Scheme (or Skim Rumah Pertamaku) allows first time house buyers to obtain up to 110% financing from the participating banks. The scheme covers residential properties that are completed and under development, in the primary or secondary market. However, eligible locations and types of properties are subject to participating banks’ underwriting policies.
To apply, you can visit the branch of any participating bank.
Eligible applicants:
- Malaysian citizen
- First time house buyer
- Salaried worker or self-employed individual
- Single or joint applicants
- Gross monthly household income:
- Up to RM5,000 for single or joint applicants
- Between RM5,001 and RM10,000 for joint applicants (subject to a maximum gross monthly household income of RM5,000 per applicant)
- No record of impaired financing for the past 12 months
Eligible properties:
- Located in Malaysia
- Maximum property value of RM500,000
- Buyers are required to reside in the property
BSN MyHome (Program Perumahan Rakyat)
BSN MyHome offers financing of up to 100% to those who are self-employed or have irregular income. The scheme is only applicable for low-cost and medium-cost properties.
To apply, you can visit any BSN branch.
Eligible applicants:
- Malaysian citizen
- Age 18 to 60 years; 65 or younger by the time the tenure ends
- Minimum income of RM1,000 a month
- No housing loans with any financial institutions
- BSN Giro/i account holder
- Security Deposit equivalent to three months of monthly instalments
Eligible properties:
- Home purchase for self-occupation
- Loan amount from RM25,000 to RM300,000
My Selangor Home
My Selangor Home, or Rumah Selangorku, provides affordable housing to those living in the state. It offers residential properties valued between RM42,000 and RM250,000.
To apply, you can register on the My Selangor Home website.
Eligible applicants:
- Malaysian citizen
- Age 18 and above
- Does not already own a house in Selangor
- For Type A houses: maximum of RM3,000 monthly household income
- For Type B, C and D houses: between RM3,001 and RM10,000 monthly household income
Residensi Wilayah
Residensi Wilayah (formerly RUMAHWIP) provides affordable housing for those living or working in the Federal Territories of Malaysia (Kuala Lumpur, Labuan and Putrajaya). Its properties are valued between RM52,000 and RM300,000.
To apply, you can register an account on the Residensi Wilayah website.
Eligible applicants:
- Malaysian citizen
- 21 years old and above
- Born, living or working in a Federal Territory
- Single borrowers: maximum gross monthly income of RM10,000
- Joint borrowers: maximum gross monthly income of RM15,000
Perumahan Penjawat Awam Malaysia
Perumahan Penjawat Awam Malaysia (PPAM) is a housing scheme specifically for civil servants in Malaysia. It provides affordable houses between RM90,000 to RM300,000 to those who are eligible.
To apply, you can register an account on the PPAM website.
Eligible applicants:
- Malaysian citizen
- Civil servant (contract or permanent)
- Civil servant who has retired and has a retirement card
What is the application process really like?
How easy is it to apply for these schemes? We reached out to Li Rong, a 33-year-old school administrator and former civil servant, to ask about her experience applying for a PR1MA home.
“I balloted for the Brickfields one. It was I think at the end of 2017 when I applied,” she said. “The process was fairly simple. The PR1MA website was very easy to navigate in terms of finding information and filling in forms.”
In March 2018, she got an invitation letter to a PR1MA showcase event, where she would be able to select her unit. “It was held at PWTC and there were many PR1MA properties on display. There was also a CCRIS counter where they asked you for your thumbprint to check your credit score. It was compulsory to get that first before you could go to your property.”
“They had models of the building on display with the unit numbers, like the typical property showrooms, so I could easily select which floor and where it faces,” said Li Rong.
She added that there was also a counter for loan applications, where they assisted her with the loan application. “It was quite an easy process too.”
While her application process was relatively quick, it can vary from person to person. PR1MA selects applicants through a random balloting process. Li Rong’s colleague who balloted for a PR1MA home in Bukit Jalil was chosen within weeks. Others aren’t so lucky – iProperty noted that some Malaysians have been on the waiting list for years.
Currently, Li Rong’s Brickfields unit is still under construction. The PR1MA website notes that it is 17% completed, with construction targeted to complete on December 31, 2022.
What else can you do?
Qualifying for one of these schemes may not automatically solve your housing woes. The Edge points out that even if you’ve successfully secured a home, affording the down payment can be a challenge. And if you opt for 100% financing, this would push up your monthly repayment.
On the upside, Budget 2021 has rolled out a few homeownership incentives. This includes a stamp duty exemption for first-time buyers until 2025, for homes priced up to RM500,000. This exemption could mean saving up to thousands of ringgit on the purchase of your first home.
If you need help with your down payment, you can also consider withdrawing from your Employees Provident Fund (EPF) savings. But this will affect your retirement savings, so it’s not a decision to take lightly.
