Right. The Government announced in the PM's Budget 2012 speech on 7th October, 2011 that, effective from 1st January 2012, the "My First Home Scheme" first launched in March this year to assist young people to buy and own their first homes would increase its present ceiling limit of RM220,000 to RM400,000 (the price of the home). So this means that if you're aged from 18-35, is/are employed in the private sector, is/are a confirmed employee with the same employer for at least 6 months and your combined household income does not exceed RM3,500-00 (i know, they reported it as RM3,000-00 but bankers informed me otherwise - so if you earn RM3,000 a month and your wife earns RM2,000 then as husband and wife jointly you do not qualify unless only one of you apply for the scheme), techinically you MIGHT be eligible for 100% financing in the purchase of your first home. You can buy landed or stratified (condos, apartments, flats) properties it doesn't matter. The government's national mortgage company Cagamas Bhd will guarantee your downpayment of 10% deposit so that the loan covers everything, including even an extra 5% financing to cover fire insurance/takaful. But that's not all. The term of the loan is 30 years' tenure but if you're a graduate or a professional, the banks can, on a case-to-case basis, stretch your loan tenure to 40 years (elitism? you tell me). Other criteria filtering out loan applicants include the requirement that your savings' reserve be at least 3 times your loan instalment sum and your combined household income is at least 3 times your total monthly commitments (that means your housing loan plus car loan, student loan, etc) or, with the approval of Cagamas Bhd, your combined household income be at least 2 times your total monthly commitments. Contrary to rumours, you DO NOT enjoy 100% exemption off stamp duty (not for the transfer nor the loan) but since this is your first home, and provided that the price of your home is not more than RM350,000-00, you get a 50% discount off stamp duty like any other first-time house buyer. (Eligible buyers of the government's other scheme, the PR1MA in which developers build on land given to them by the govt get to enjoy 100% stamp duty exemption off their loan but not My First Home Scheme). There are no other restrictions, you can sell off your home like other property owners at any time (unlike PR1MA where there is a 10-year moratorium against selling your property) but subject of course to real property gains tax as usual. Details are a bit sketchy but under the old scheme, only husband and wife or siblings are eligible. Friends, business partners, relatives do not qualify. And if you already bought a house previously and sold it off and now you want to buy a new house, you do not qualify neither. Only first-time, VIRGIN house buyer is eligible, geddit?
The following 25 banks/financial institutions are participants in the My First Home Scheme:
- Affin Bank Bhd
- Affin Islamic Bank Bhd
- Alliance Bank Malaysia Bhd
- Alliance Islamic Bank Malaysia Bhd
- AmBank Bhd
- AmIslamic Bank Bhd
- Bank Islam Malaysia Bhd
- Bank Muamalat Malaysia Bhd
- CIMB Bank Bhd
- CIMB Islamic Bank Bhd
- EON Bank Bhd
- EONCAP Islamic Bank Bhd
- Hong Leong Bank Bhd
- Hong Leong Islamic Bank Bhd.
- Maybank Bhd
- Maybank Islamic Bank Bhd
- OCBC Bank Malaysia Bhd
- OCBC Al Amin Bhd
- Public Bank Bhd
- Public Islamic Bank Bhd
- RHB Bank Bhd
- RHB Islamic Bank Bhd
- United Overseas Bank Malaysia Bhd
- Standard Chartered Bank Malaysia Bhd
- Standard Chartered Saadiq Bhd
Unfortunately, the interest rate for this scheme will cost more. I am informed by a source at the time of writing that, while the interest rate for housing loans is now BLR - 2.2%, under the My First Home Scheme the interest rate is BLR - 1.8%. So, stretch that over 30 or 40 years and this scheme isn't exactly going to save you money.
At the end of the day, you decide whether this scheme really helps young salary earners to buy their first home or it is just another elections gimmick with precious little to offer in substance.
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