A programme that helps home-buyers cover the cash portion of the purchase price would be more effective in enabling more lower and middle income families to get on the property ladder, according to a finance practitioner behind the country’s pioneering rent-to-own (RTO) programme for affordable housing.
Studies had shown that many prospective first-time and affordable homebuyers were unable to bridge the difference between the loan secured and the purchase price as banks typically capped lending at 90% of the property value.
The problem would be more acute if the bank had approved a lower loan margin which would force the home- buyer to dig deeper into their savings to make up for the financing gap, or worse, call off the purchase.
“The underlying issue is that property prices are still too expensive for most people,” said Datuk Hasleen Isnin (picture), the former CFO of PR1MA Corp Malaysia, a government agency tasked with providing affordable housing for middle income urban families.
