The Employees Provident Fund (EPF) is expected to gain a 5.5 percent profit from its RM1.5 billion funding of the Special Funding Scheme for eligible tenants to purchase Kuala Lumpur City Hall (DBKL) houses.

Therefore, the EPF would not lose money in the scheme, said Federal Territories and Urban Well-being Minister Raja Nong Chik Raja Zainal Abidin today.

“The loan is very secure and EPF is getting a 5.5 percent clean return per annum.

“At the same time, it can help the people who need it,” he said during a briefing on the scheme at the DBKL headquarters in Kuala Lumpur, today.

The People’s Housing Programme-National Economic Action Council and DBKL Public Housing special scheme, announced by Prime Minister Najib Abdul Razak last Tuesday, is aimed at helping existing tenants to obtain funding to purchase the houses for sale.  

The scheme would commence this March and buyers are expected to sign the sale and purchase agreements in May.

Raja Nong Chik said the houses would be mortgaged to EPF and DBKL had the power to foreclose on buyers who had installments in arrears of six months.

“DBKL would then resell the properties to those on the waiting list, which now numbers 27,000 people,” he said.

To ensure DBKL had sufficient funds to buy back the properties, EPF has placed a condition that it set up a Redemption Reserve Account with 20 percent of profits allocated under the scheme.

- Bernama