Three years ago, Selangor introduced a special loan scheme allowing low-income families with a household income of between RM800 and RM2,500 to own houses by merely paying a RM1 deposit.

To qualify for the Tabung Perumahan Ehsan (TPE) - a fund offered through Arab-Malaysian Finance Berhad - first-time applicants must register with the state, not have outstanding loans, not be blacklisted by any financial institutions.

Repayment period for the 110 percent loan is either up to 40 years or until the applicant's 70 th birthday, depending on which comes first. Both legal and the sale and purchase fees are completely waived.

However in reality, the targetted low-income group and many senior ministry officials are totally ignorant of the policies regarding low-cost house pricing and loan schemes.

Developers blamed

The Selangor and Federal Territory Community Association (Permas) said this was due to ineffective dissemination of information and a lack of public awareness.

"This has left many eligible persons scrambling in search of the stipulated 10 percent deposit for a unit," its president, Tan Jo Hann, told a press conference in Petaling Jaya today. About 20 community leaders were also present to relate their first-hand experiences of dealing with the authorities, some for more than 20 years.

"The developers are largely responsible for the existing problems afflicting low-cost housing. For example, they often remain silent on the special loan scheme for low-income buyers."

After studying the TPE and talking to the bank, Tan said it was a good financing scheme for home ownership of the poor.

Developers in Selangor, he said, "conveniently omitted the fact that RM42,000 is the price for low-cost units in Kuala Lumpur and for outside applicants".

He said the loan scheme gave priority to squatters and longhouse-dwellers to own low-cost units priced between RM25,000 and RM35,000 that are located within the vicinity of their present homes in Selangor.

Applicants from squatter areas or longhouses (transit homes spanning six months to two years) located elsewhere are supposed to buy each unit for RM42,000 so that families are not drastically uprooted, he explained.

But in practice, he said, many developers failed to draw the price differences when dealing with people.

"They continue to offer low-cost units to both outside and local applicants in Selangor at RM42,000, cunningly justifying their actions by hiding behind the government's approval of a ceiling price.

"When residents protest, developers lower the price to RM35,000 and claimed credit for being kind enough to offer a RM7,000 discount, when they are not allowed to charge that price in the first place," he added.

What glut?

The furore over the poor's housing woes surfaced after Selangor Menteri Besar Dr Mohd Khir Toyo announced plans to resolve the glut of unsold low-cost units in the state by selling them to the rich for rental to the poor.

Following this, Prime Minister Abdullah Ahmad Badawi openly rebuked the idea and reiterated the federal government's policy on providing low-cost housing for the low-income group.

Tan also commended Housing and Local Government Minister Ong Ka Ting in rejecting the RM8,000 price hike proposed by the Real Estate and Housing Developers Association on grounds that the price of steel bars have increased.

"How can there be a glut anywhere when the poor are begging the government everyday for low-cost houses?" he asked.

He said pricing of low-cost houses was a complicated issue. "Not only are we confused, even senior government officers are themselves unsure what the current policy or figures are, due to too many versions issued by different authorities."

Tan related an incident where some people from Melaka and Johor, who already owned houses, had come to buy low-cost units in Kuala Lumpur and Selangor as an investment.

"In relating their story, they told us they paid RM7,000 to someone who guaranteed them a unit.

"Despite numerous complaints lodged with the Anti-Corruption Agency based on personal accounts such as the above, nothing has been done," he said.

Tan added that memoranda detailing housing problems for the poor were submitted to the Human Rights Commission of Malaysia and Ong about two or three years ago but there has been no follow-up.