Government mulls Housing Guarantee Scheme to protect homebuyers

PUTRAJAYA (Feb 10): The government is mulling the implementation of a Housing Guarantee Scheme to safeguard the interest of homebuyers and developers.

Wellfare, Urban Wellbeing and Local Government Minister Datuk Abdul Rahman Dahlan said that a corporation would be set up under the proposed scheme, in which the government would take up a 70% stake.

Meanwhile, the remaining 30% of the stake could be taken up by the Real Estates and Housing Developers' Association Malaysia (REDHA) or government institutions with funding capability such as Employees' Provident Fund (EPF) and Lembaga Tabung Haji.

"Under the proposal, the government would come up with 70% of the initial capital. According to calculation, the basic capital is about RM400 million, and 70% which is RM280 million, to be injected into the corporation," Abdul Rahman told a press conference after chairing the roundtable discussion on the scheme to get input from the representatives from the Korea Housing Guarantee Co Ltd, industry player and banks.

The Housing Guarantee Scheme is a scheme to guarantee the housing project's completion by charging a minimal amount of premium, ranging from 0.5%-1% of the house price, from each transactions. Nevertheless, the government is hoping the developer could absorb the charges in their cost.

If the housing project is not completed, the corporation would take over the project and complete it, to ensure that the properties are delivered to the buyers, according to Abdul Rahman.