KUALA LUMPUR (July 4, 2016): The
government’s Youth Housing Scheme (YHS) has attracted lukewarm response from
first-time home buyers at best, a year after its launch, attracting only about
12% of the 20,000 total application quota over a two-year period.

Up till May 2016, more than RM300 million
worth of loans have been approved, out of the 2,500 applications received.

Bank Simpanan Nasional (BSN) senior
vice-president and head of retail and community business Datuk Mearia Hamzah
said the situation could be due to the mismatch between the price range under
the scheme and the type of homes that are needed by the target market.

“Look at
the house prices. Can you buy anything within 10km or 20km from Kuala Lumpur
for the price range allowed?” she asked during an interview with SunBiz recently.

According to her, some first-time home buyers
who work in the city end up buying homes in locations where they have to travel
two hours to work daily.

Although the terms of the scheme are very
attractive, house prices, at least for dwellings within a reasonable distance
from the city, have shot up beyond the RM100,000 to RM500,000 range allowed
under YHS.

Mearia pointed out that some homes offered
within that price range are not suitable for young married couples who intend
to start a family.

“Developers may launch something less than
RM400,000 but it could be just a studio unit with a SOHO (Small Office Home
Office) concept,” she said.

“SOHO units have no bedroom. If you just got
married and have no kids, it’s okay but once you have children, I don’t think
the place is suitable.”

The National Higher Education Fund Corp’s
(PTPTN) decision to list borrowers who fail to repay their loans in the Central
Credit Reference Information System (CCRIS) has also dampened the take-up rate
for YHS.

“Those who still owe PTPTN are afraid to
apply because they know the application will not go through. These are the
borrowers who have not paid (their PTPTN loans) for a long time. They feel that
there is no point for them to apply (for YHS),” said Mearia.

It was reported in April that a total of 1.25
million PTPTN borrowers who failed to repay their loans were listed in CCRIS.

“The government did seek feedback from BSN.
We hope that they can also assist us to do something about it. At the end of
the day, we try to market the scheme but (what) if there are no takers?

“The scheme is still open and the government
will advise us whether the scheme will continue or not. As of now, we are still
continuing with it,” Mearia said.

Introduced in July 2015, the scheme was
announced under Budget 2015 and is a partnership between the government, BSN,
Cagamas Bhd and the Employees Provident Fund.

Targeted at first-time buyer married youths
aged between 25 and 40 with a combined household income of no more than
RM10,000, the scheme is limited to 20,000 applicants or valid for two years,
whichever comes first.

Under the scheme, BSN, the sole bank
appointed to execute the scheme, provides 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 of up to 5% of the purchase
price for the cost of Mortgage Reducing Term Assurance or Mortgage Reducing
Term Takaful.

Successful applicants enjoy monthly
disbursements of RM200 from the government for the first two years from the
first disbursement and 50% stamp duty exemption on the sale and purchase
agreement as well as facility legal documents.