The Housing Credit Guarantee Scheme (HCGS) is a very effective but less known financing for homebuyers. Last year, the ministry received only a few applications, out of which 1,819 have been approved, involving a total guarantee of RM303 million.
However, the scheme is still active under Budget 2022. The provision will guarantee up to RM2 billion through Syarikat Jaminan Kredit Perumahan (SJKP). It is expected to benefit at least 6,000 people, including the youth, gig workers and micro-entrepreneurs.
What is Housing Credit Guarantee Scheme (HCGS)?
Housing Credit Guarantee Scheme (HCGS) is financing facilitated by the government through SJKP to help Malaysian homebuyers to afford a house. It is particularly beneficial for those who do not have any fixed income as they do not have regular payslips and thus struggle to acquire a suitable loan from the bank.
Under the scheme, the borrower can apply for a term loan/ term financing up to RM400,000. The amount will cover Mortgage Reducing Term Assurance (MRTA), Mortgage Reducing Term Takaful (MRTT), Long Term House owner’s Takaful (LTHO), solicitor’s fee and valuation fee. They will be given a 100% guarantee for the total financing from participating financial institutions.
HCSG’s active participating financial institutions are:
- Agro Bank
- Bank Islam Malaysia Berhad
- Bank Muamalat Malaysia Berhad
- Bank Kerjasama Rakyat Malaysia Berhad (Bank Rakyat)
- Bank Simpanan Nasional (BSN)
Who is eligible to apply for HCGS?
All Malaysian citizens aged 18 years or above can apply for this facility regardless of their occupation, provided it is their first home purchase and intended for their own occupancy. The scheme guarantees loans up to 35 years or up to the tenure of the loan financing, whichever is earlier.
The facility allows a 2-generation loan to extend the repayment period to make things easier for aged applicants. If the participating financial institution agrees, the aged applicant can jointly apply with his daughter or son. In this case, the child’s age will be considered to pay off the loan.
The applicant must ensure that their loan repayment amount is below or equivalent to 65% of their gross monthly income. They must maintain a clean Central Credit Reference Information System (CCRIS) record with no more than 2 months of arrears within a period of 12 months. Additionally, applicants who have no adverse credit records within the last 24 months are most eligible for this facility
What type of houses can applicants buy under this scheme?
HCGS is applicable for all low and medium-cost houses under construction or ready to move in. It is open to all private and government developers, including new launches, auction houses, houses in affordable categories or secondary market properties.
How to apply for HCSG?
- The applicant has to select the house they wish to purchase.
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They have to prepare supporting documents:
- Bank statements for all parties.
- Fixed income earners must submit salary slips and Employment Provident Fund (EPF) statements.
- Non-fixed income earners will have to submit a confirmation letter of their income status from authorised personnel. It can be a category A governemnt officer, Chairman of Jawatankuasa Kemajuan dan Keselamantan Kampung (JKKK), ‘Penghulu’, elected represesntative or a bank branch manager.
- Business license, fisherman registration card or other related documents for traders and service providers.
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Once the documents are ready, the applicant can bring them to their nearest participating financial institution branch and apply for house financing under HCSG.
To know more about the facility, you can visit SJKP in Bangunan Setia 1, 15 Lorong Dungun, Bukit Damansara, 50490 Kuala Lumpur. Or you can call them at +6 03 2096 5000 or send an email at enquiry@sjkp.com.my.
