Low-cost housing residents who have borrowed to buy their homes could be given nearly twice as long as they expected to pay back their loans, a leading bank has announced.
U Win Zaw, managing director of the Construction and Housing Development Bank, told The Myanmar Times on October 14 the goal was to avoid overloading buyers with overly onerous repayment plans.
“We’re preparing to increase the repayment period from eight years to 15 for customers who have taken out a loan for low-cost housing,” he said. “We’re waiting for the final conditions to be put in place before we confirm the plan, and then we will immediately implement it,” he said.
A joint venture between the government and a private firm, under the Ministry of Construction’s supervision, the Construction and Housing Development Bank was established in January 2014 to provide long-term loans for home buyers and to spur the development of local construction companies. The only housing development bank in the country, it was launched with K100 billion in capital and 46 shareholders.
The first home loans were granted to buyers in the Shwe Linn Ban low-cost housing development built by the construction ministry and the Department of Urban and Housing Development in October 2015.
U Win Zaw said the granting of loans would depend on an assessment of an applicant’s ability to afford a home, how much money they could pay per month and whether they could afford the 30 percent down payment.
An initial requirement to repay the loan within four years had already been doubled to eight years because so many applicants faced difficulties in meeting the payments, as well as the 30pc down payment, he said.
“Under the previous government, low-cost housing was sold to people under the lottery system. But many of the lucky winners could not actually afford the apartments,” he said. “In the case of the Shwe Lin Ban low-cost housing development, we found that very few people could afford the K4 million required for the 30pc down payment for a K12 million apartment. Nor could they make the repayments over four years. We lent them the money over an eight-year period, and now we will increase that to 15 years,” he said.
The current government plans to build 8000 apartments priced at under K10 million in Dagon Seikkan, Mingaladon and Thanlyin townships, Yangon Region, as an initial project.
“We’ve already invited people to buy low-cost apartments by opening a Housing Savings Account at CHDB,” said the bank’s deputy director, U Min Aung Aye. “Applicants can pay the first 30pc through the CHDB. We will give priority to people who have Housing Savings Accounts.”
A total of 2208 apartments in Yuzana and Kanaung low-cost housing projects in Dagon Seikkan township and the Shwe Lin Ban project in Hlaing Tharyar township will soon go on sale to the public for prices ranging from K12 million for a ground-floor apartment to K9,800,000 for a fourth-floor apartment.
The Construction and Housing Development Bank has so far loaned K7 billion to more than 500 home buyers and K90 billion to more than 200 companies. More than 5000 people have opened Housing Savings Accounts with the bank since August.
The Ministry of Construction’s DUHD says it will build up to 200,000 low-cost units throughout the country over the next five years.
Translation by Emoon and Win Thaw Tar
Quoted from mmtimes.
