If NFC can get soft loan, why not house buyers...

Rather than utilise RM1.5 billion from the Employees Provident Fund (EPF) for low-cost housing loans, the federal government should explore such options as the soft loan enjoyed by National Feedlot Corporation (NFC), said Lembah MP Nurul Izzah Anwar.

She was commenting on Federal Territories and Urban Wellbeing Minister Raja Nong Chik’s (right) denial that the Treasury had run out of money, hence having to resort to getting funds from the EPF.

“Nong Chik’s denial that ... the federal government has run out of money, opens up the possibility of alternative funding options for home buyers,” she said in a statement today.

She offered two alternatives in helping the poor to buy houses.

If NFC could be given RM250 million in a soft loan at 2 percent interest, she said, the needy could be afforded the same terms.

“The minister should respond as to why the same loan consideration wasn’t extended to the rakyat,” she said, noting that KL City Hall has indicated that the interest could be 6.5 percent.

Nurul Izzah also suggested a‘rent-to-own and zero interest’ scheme.

“For example, a RM35,000 unit for 20 years would only require a RM145 monthly repayment not including building maintenance fees.

“This approach would fulfill a people-centric economic goal since the units offered have already been built and currently occupied with the construction costs already accounted for.”

She called it a “win-win” concept that could ride on the existing administrative systems. The MP challenged Nong Chik to call for a referendum to allow people to choose which option they feel is best for them.

Nurul Izzah also said she accepted the minister’s challenge to an open debate, but said it should be telecast ‘live’, similar to that mooted between Penang Chief Minister Lim Guan Eng and MCA president Dr Chua Soi Lek.

“This indeed would be democracy in practice, predicated upon the right to information for the rakyat. After all, Malaysians want to know for certain that our Treasury is really not empty,” she added.

Replace EPF loan scheme with rent-to-own...

Putrajaya could help council tenants buy homes by offsetting their monthly rental against the purchase price instead of borrowing RM1.5 billion from the Employees Provident Fund (EPF) to set up a new loan scheme.
 

Pakatan Rakyat (PR) leaders also suggested that the federal government could charge the unqualified home buyers a nominal interest on their loan, similar to the deal it offered the National Feedlot Corporation (NFCorp) for a RM250 million soft loan to run a cattle-farm business in Gemas, Negri Sembilan.

Nurul Izzah also suggested that the federal government offer a two per cent interest rate soft loan for the home loan project, similar to the kind given to NFCorp for the cattle-farming project. — File pic

They offered these suggestions today as examples of what they see as equitable funding solutions to the government’s controversial proposal of offering loans to unqualified buyers using money from the pension fund. 

The PR MPs also questioned why the EPF loan scheme was not included in the 2012 Budget which had been approved in Parliament last year, saying that the “sudden” announcement validated perceptions of it being a “vote-getting” scheme by Barisan Nasional.

Federal Territories and Urban Well-being Minister Raja Datuk Nong Chik Raja Zainal Abidin had blamed opposition lawmakers for making “baseless” allegations on the matter, but refused to disclose why Putrajaya was resorting to borrowing money from the workers’ retirement fund.

“Taking Raja Nong Chik’s statement at face value, I propose that the government consider these two options, which the government can rightly consider, since, according to Raja Nong Chik, the Treasury has the money,” PKR vice-president Nurul Izzah Anwar said in a statement today.

She said a more equitable funding mechanism could be used, called a “Rent-to-Own and Zero Interest Scheme”, whereby interested home owners would pay a flat RM145 per month to Kuala Lumpur City Hall (DBKL) for 20 years in order to pay up the cost of RM35,000 for a low-cost unit.

The Lembah Pantai MP said this approach would fulfil a “people-centric” economic goal since the units offered have already been built and currently occupied with the construction costs already accounted for.

“This scheme would also eliminate any further administration cost as the existing monthly rental collection system in use can remain. This is a win-win concept for all stakeholders,” said the PKR leader, adding that it should also be expanded to include all Malaysians who qualify under the lower-income category.

A second alternative funding option, she said, was for the federal government to offer a two per cent interest rate soft loan for the project, similar to the kind given to NFCorp for the cattle-farming project.

“Based on an annual 6.5 per cent interest rate for a 25-year loan tenure would increase the price of the units from RM35,000 to RM70,800 compared to an annual two per cent interest rate levied for 25 years of just RM44,400.

“The minister should respond as to why wasn’t the same loan consideration for the NFC extended to the rakyat in this scheme. It would seem that the minister’s announcement of a 10 per cent default rate is connected to the 6.5 per cent high interest rate charged to the low-income earners,” added Nurul Izzah.

She said a referendum should also be held for residents who will be applying for the EPF home loan scheme to see whether they would prefer other options.

“Finally, I accept the minister’s challenge to an open debate which should be titled ‘Which is the best funding option for PPR-PA home ownership?”. This debate should also be telecast live on television, similar to the live telecast of the debate between the Penang chief minister and MCA president by Astro,” Nurul Izzah said.

Pua questioned the need to create a special housing programme for the Federal Territories.

DAP national publicity secretary Tony Pua questioned why Raja Nong Chik’s ministry needed to create a special programme for the Federal Territories when the government had already allocated funds for Syarikat Perumahan Negara Bhd (SPNB) to resolve housing issues for low-income Malaysians. 

“If his low-cost housing plan is not a sudden vote-getting scheme, then why was it not budgeted for in the 2012 Budget approved in Parliament last year?

“The fear is really that FTF (Federal Territories Foundation) is being used as the vehicle for extending the loans instead of other government agencies such as SPNB or government banks such as Bank Rakyat or BSN (Bank Simpanan Negara) because Nong Chik is in full control of FTF as its chairman, and will be able to direct the loans for political objectives, especially since he is expected to contest in Lembah Pantai in the next general election,” Pua told The Malaysian Insider over the weekend.

The DAP MP said as minister, Raja Nong Chik needed to abide by all the conditions imposed by the EPF in the project, especially the need to appoint a financial institution to manage the loans to ensure that the funds will not be abused.

The federal opposition has accused BN of abusing monies from the pension fund to hide its current debt levels under the guise of offering a purportedly “noble” housing loan to lower-income earners.

Civil servants and private sector unions have said they were not consulted over the fund utilisation plan. Raja Nong Chik has however declined to comment about this as well as why the government did not just use federal funds to finance the loan scheme.

The EPF clarified last week it is in talks with a government agency to provide loans to city renters to buy homes but that the deal has not been inked. It also said that the terms involve lending an initial sum of RM300 million to the federal government through a special purpose vehicle linked to the FTF, and that the firm will act as the middleman to grant the home loans to potential home buyers. - malaysian insider

 4U 2 C...

cheers.