BNM may relax lending rules for Penang's shared ownership scheme applicants, says exco

GEORGE TOWN, Nov 4 — Bank Negara Malaysia (BNM) is considering loosening its strict housing loan criteria for applicants under Penang's shared ownership scheme (SOS), state executive councillor Jagdeep Singh Deo said today.

The state housing development committee chairman said BNM welcomed the state's introduction of SOS.

"They have said the loan applications by SOS applicants may be considered differently since the state government bears part of the scheme," he said.

Jagdeep met with BNM assistant governor Abu Hasan Alshari Yahaya two days ago to discuss ways to resolve the high housing loan rejection rates that had affected many house buyers.

"If BNM can agree on a formula to ease the approval for loan applications under SOS, the state government is prepared to expand the SOS to other development projects," he said.

The SOS was announced in November last year and the pilot SOS project was launched in April this year where the state government purchased 104 units of town houses in Taman Sungai Duri Permai for the scheme.

Under the scheme, each applicant need only apply for a housing loan of 70 per cent of RM38,000 for a unit while the remainder sum will be loaned to them by the state without charging interest.

Jagdeep said he had also suggested to BNM to re-introduce the Developers Interest Bearing Scheme (DIBS) only for first time buyers of affordable housing units.

"After the discussion with BNM, it is agreed that even though the criteria for loan approvals must be strictly adhered to, there is still space for cooperation between BNM and the state government to cooperate in reducing loan rejection rates," he said.

He believed that there is a misunderstanding between the state housing department and the banks on loan application requirements and the state's criteria for affordable housing applicants.

"To ensure that BNM fully understands the state's housing policy, we have agreed to organise a workshop to discuss in detail the banking process in considering loan applications as compared to the state's criteria," he said.

Jagdeep hoped to hold the workshop sometime in December after the state legislative assembly.

"We hope that thus workshop will result in positive proposals to address this issue of high loan rejection rates so that more people can buy their own homes especially within the affordable housing range," he said.