‘LPPSA borrowers can defer payments on houses under construction'

PARLIAMENT l Borrowers who took the Public Sector Housing Financing Board (LPPSA) loan can enjoy a 24-month deferment period for houses on land that are still under construction.

Deputy Finance Minister II Steven Sim said a 36-month deferment period is given to borrowers who buy high-rise apartments or until the disbursement of the housing development payment to the developer reaches 95 percent, whichever is earlier.

In other words, borrowers do not actually have to start servicing the loan during the deferral period, which is an advantage of LPPSA financing for civil servants, said Sim (above).

"This also applies if the housing project is completed late and has been confirmed as an abandoned or sick project by the Local Government Development Ministry and the Sabah and Sarawak Local Government and Housing Ministry after the expiry of the grace period.

"LPPSA can still help reschedule financing repayments with lower monthly instalments of around 20 percent to 40 percent of the original monthly instalments up to a period of five years or until the house project is restored, whichever is earlier," he said during the oral question and answer session in the Dewan Rakyat today.

Sim answered a question from Khlir Mohd Nor (Perikatan Nasional-Ketereh) who asked if LPPSA could temporarily halt salary deductions while waiting for unfinished housing projects to resume.

Repayment rescheduling

He said this repayment rescheduling assistance has benefited a total of 1,187 borrowers from 2016 until now.

However, he added that there is no record under the Housing Loan Division for the application and approval of the rescheduling of repayments for the year 2015 and before that.

He said that the method of rescheduling repayments is seen to be more helpful to borrowers than stopping repayments until the house is ready.

"This is due to delayed instalment payments that will accumulate and cause the monthly repayments after the house is completed to be large and burden the borrower later.

"The extension of the repayment period will affect the protection of takaful or mortgage insurance of the borrower which exposes to a reduction in the amount of the death or disability compensation claim payment compared to the remaining financing if the borrower dies.

"LPPSA is also responsible for ensuring the continuation of housing financing facilities for all eligible civil servants through the collection of refunds that we implement," Sim said.

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