Bank Negara Malaysia (BNM) has announced the establishment of a RM1 billion Fund for Affordable Homes to help those from the lower income group nationwide finance the purchase of their first houses.

In a statement today, BNM said the fund would be available for two years from Jan 2, 2019, or until the RM1 billion was fully utilised.

Eligible home buyers could obtain financing (conventional or Islamic) at a concessionary rate at participating financial institutions, including AmBank, Bank Simpanan Nasional, CIMB Bank, Maybank and RHB Bank.

The BNM’s Fund for Affordable Homes is available to Malaysian citizens with a maximum monthly household income of RM2,300.

Other criteria include the property price being up to RM150,000 and the financing rate up to 3.5 per cent per annum.

The central bank said owning a home was a major investment or commitment for many people, so it was important for prospective home buyers to assess their ability to meet the financial commitments associated with owning a home, including mortgage repayments and other related expenses.

To assist first-time home buyers in this, it said, an easy and convenient online financial education module would be provided by the Credit Counselling and Debt Management Agency (AKPK) for house buyers that applied for financing under the fund.

The bank said members of the public could contact the participating financial institutions for further information.

BNM said the launch of the fund would be complemented with a broader range of measures to assist house buyers with monthly income of RM5,000 and below, to purchase their first home priced up to RM300,000.

"These measures, which apply to eligible home financing from all financial institutions, are aimed at lowering the ancillary costs of home ownership for qualified borrowers and include stamp duty exemption, affordable rates for mortgage protection cover and waivers on the legal fees on sale and purchase and financing agreements," it added.