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Jakarta Post

Govt preparing subsidized mortgage scheme for millennials

  • News Desk

    The Jakarta Post

Jakarta   /   Tue, December 11, 2018   /   10:20 am
Govt preparing subsidized mortgage scheme for millennials Public Works and Housing Minister Basuki Hadimuljono (Antara/Hafidz Mubarak A.)

Owning a house is a dream for everyone, including millennials, but the majority of them find it hard to put aside their income for a down payment and monthly mortgage installments because of increasing property prices.

In response, the government is preparing a policy to provide subsidized mortgages to millennials.

Public Works and Housing Minister Basuki Hadimuljono said in Jakarta on Monday millennials would be included as potential recipients of the subsidized housing loan for civil servants, military personnel and police officers.

Basuki said under the scheme, all banks would be able to distribute the housing subsidy to millennials via the Housing Financing Liquidity Facility (FLPP) scheme, which is currently designed for low-income people with monthly salaries between Rp 4 million (US$273.88) and Rp 7 million.

Therefore, he stressed that millennials with salaries higher than Rp 7 million could not obtain the subsidized mortgage from the government, although removing the salary limit had been considered.

“The president’s instruction has formulated a scheme for civil servants, military personnel and police officers. I will add millennials [as beneficiaries]. Next year, the scheme will be implemented,” Basuki said.

“The Finance Ministry and the Financial Services Authority [OJK] are formulating the scheme. We have met twice and the draft is currently being finalized by echelon I officials.”

Budi Satria, consumer director of state-owned lender PT Bank Tabungan Negara, a lender that prioritizes mortgage financing, said the bank was still waiting for the mortgage scheme to be finalized.

He said the scheme was designed to make housing more affordable for low-income people. “The scheme is still being discussed by ministries. Many things are being discussed. There was a proposal for a special program. There was also an idea to offer mortgages with higher credit tier,” Budi added. (bbn)