KUALA LUMPUR, Nov 11 — The operator of FundMyHome today placed full-page colour advertisements in several newspapers outside its stable to promote its scheme amid scrutiny over risks posed and allegation of government ties by former prime minister Datuk Seri Najib Razak.
Datuk Tong Kooi Ong, chairman of FundMyHome’s operator EdgeProp Sdn Bhd, came out to defend the scheme after Najib questioned the timing of its launch last Sunday by current PM Tun Dr Mahathir Mohamad, two days after the Pakatan Harapan government announced the introduction of a novel peer-to-peer financing programme for first-time house buyers under Budget 2019.
Today, EdgeProp via the newspaper advertisements touted FundMyHome as the better choice to owning a home in two scenarios.
In the first scenario, FundMyHome said a young couple with two children and a monthly household income of over RM5,000 would be better off joining the scheme instead of renting a home at RM1,250 per month.
As for the second scenario of parents wanting to help their working children own homes, FundMyHome said it would be better to use its scheme instead of having the child taking out a 30-year housing loan at a fixed interest rate of 4.5 per cent to cover 80 per cent of the purchase price.
The advertisements by FundMyHome, which carried the tagline “Where everyone can own a home”, were spotted in English-language The Sunday Star, Malay language Sinar Harian and Chinese vernacular Sin Chew Daily. EdgeProp also placed similar banner advertisements online with Malay Mail.
The advertisements did not state the risk or outcomes if the property price goes up or goes down after five years, but said readers can find out more through the FundMyHome portal or by contacting its operator.
The FundMyHome initiative is where first-time house buyers pay 20 per cent of the purchase price, while institutional investors such as banks pay the remaining 80 per cent of the purchase price for a share of future profits if the property value goes up and with their 80 per cent share buyable after five years by the buyer.
The FundMyHome portal outlines further information and terms and conditions, including the risk that buyers face of losing their capital if the property devalues at the end of five year and institutional investors or banks being prioritised for the recovering of capital.
The amount that buyers need to refinance or pay to buy off the 80 per cent share after five years goes up if the property appreciates, the portal’s information shows.
The portal also outlines how the proceeds of a sale of the property would be split between buyers and institutional investors at the end of five years, depending on the property value going up or down or remaining the same.
Tong had previously rejected claims that FundMyHome opened the private initiative to risks that could lead to a subprime crisis, though he said it did not currently need regulatory approval as only institutional investors were involved for now.
He had also sought to distinguish FundMyHome from the government’s similar initiative as announced in Budget 2019.
Malay Mail recently published a quick guide on the scheme, based on the latest information on FundMyHome’s portal: What first-time house buyers should know about FundMyHome.
