Instead, EdgeProp Sdn Bhd chairman Tong Kooi Ong told FMT that there was no particular income group targetted by proponents of the scheme, which has come under fire since it was announced by Finance Minister Lim Guan Eng when tabling the 2019 Budget this month.
He said those interested must have savings to be able to pay for the 20% downpayment, which is at the heart of criticism that it was beyond the reach of most Malaysians.
“If the buyer does not have savings, he will have to borrow from his parents or friends. In order to get the RM60,000 loan, he will also be vetted by the banks and so forth, so that vetting process is already in place,” he said.
Tong said that housing for the poor was the responsibility of government agencies and not the private sector.
“A lot of people make a lot of assumptions. If you look at the criticism or cynicism raised, a lot of them relate to the fact that they think we are addressing a different market.
“Some people think our role is to supply houses to everybody but we can’t. How can a person with a salary of RM1,000 or RM1,500 monthly and two kids come up with RM60,000?” said Tong.
He said the scheme, where buyers and banks participate in funding the purchase of homes, was not a solution to affordable home ownership.
“If the person needs social housing and so on, we can’t quite help them,” said Tong.
‘Some aspects are risky’
Under the FundMyHome scheme, buyers pay 20% of a property price, which is then placed in a trust account to pay off the 5% annual investment return to the participating institutions for a five-year period.
The balance of 80% will be contributed by participating banks. There is no monthly repayment for the first five years, after which buyers either sell, buy out the remaining property portion not owned by them, or refinance the property.
Any fall in the value of the property after the five years is borne by the homeowner. However, this is limited to the 20% capital invested at the time of buying. They also cannot sell the house in the first five years.
Tong said the scheme was not meant as a solution for all potential homeowners, but an additional option in the market for property selling.
At today’s briefing, Tong explained that some aspects of the FundMyHome scheme may have more advantages compared to taking out a normal mortgage.
But he admiited that other elements could be riskier, such as if the purchased property price increased by more than 17% after the five-year period.
He said with FundMyHome, the loss incurred is limited to the 20% capital invested.
“The (viability of the) scheme rests on homebuyers who are willing to share their future capital gains in exchange for the benefits of owning and occupying a home now,” Tong added.
‘Ready to meet Najib’
Politicians as well as property experts have questioned if FundMyHome will benefit buyers. Critics also include former prime minister Najib Razak.
Saying he was open to meeting Najib and other critics of the scheme, Tong said that Najib most probably “does not want to see him”.
The Real Estate and Housing Developers’ Association (Rehda) has also added to concerns over the crowdfunding scheme.
Rehda chairman Jeffrey Ng had instead mooted a Residential Real Estate Investment Trust (Residential REIT) to solve affordable housing for the poor where the government would provide sites for social or public rental housing in urban centres.
The trusts could build public housing at their own cost, and the Residential REITs would obtain the right to rental returns from the development for 30 years at prefixed rental rates.
Tong welcomed Rehda’s proposal, but questioned whether the government will be able to foot the cost for 30 years’ worth of rental.
He said it would be problematic when everyone could jump in at the chance of not having to pay rent.