With the overall cost of properties steadily increasing during this day and age, potential homeowners (particularly young adults and graduates) are finding it very difficult to afford a home anywhere, let alone one even remotely close to major cities in Malaysia. In an effort to help these people, the government has introduced the Malaysia My First Home Scheme.
What is the Malaysia My First Home Scheme?
The Malaysia My First Home Scheme (MFHS) was introduced in early 2011 by the government with the sole purpose of assisting young adults, who have joined the workforce and earning RM3,000 per month or less, to own their first home.
This scheme allows young adults to obtain 100 per cent financing from financial institutions (100% LTV / margin as opposed to the usual 90% offered by most banks), enabling them to own their first house without the need to pay a 10 per cent down payment.
Cagamas SRP Berhad will guarantee the banks on financing above 90% level i.e. if a borrower obtains 100% financing, Cagamas SRP will guarantee 10% (from 90% to 100%) of the financing.
Budget 2013 Update
During the recent announcement of the 2013 Budget, the government has gone ahead and increased the monthly income eligibility to RM5,000 for individuals (RM10,000 for couples) which definitely makes more economic sense. The RM3,000 monthly income limit seemed to be too low for amounts between RM220,000 – RM400,000.
Also, the requirement for a savings record equivalent to three months’ installment and minimum employment of six months has been abolished.
In addition to that, for first time house buyers, the current 50% stamp duty exemption on the purchase of first residential property will be extended to 31 December 2014 ( from December 31 2012), and the upper limit for eligible properties for this exemption was increased from RM350,000 to RM400,000.
To find out more about how the 2013 Budget affects your property purchase and other things, check out our Malaysia Budget 2013 article.