GEORGE TOWN: Penang will be piloting a rent-to-own (RTO) scheme for those eligible to purchase low-cost (LC) and low-medium-cost (LMC) units to increase home-ownership in the state.
Chief Minister Chow Kon Yeow said the initiative could also help to ease their financial burden as they would not have to service home loans.
He said the scheme would also help address the high loan rejection rate for these categories of people.
Although LC and LMC units are priced at RM42,000 and RM72, 500 respectively, many buyers hardly get the green light for their loan applications.
Therefore, after considering the plight of those who had their loans rejected, Chow said the state decided on the scheme to help aspiring homeowners.
"We had discussed it during the exco meeting and we will also provide time for the State Housing Department to fix certain mechanisms before giving it a go," he told reporters during his visit to the Penang Island City Council (MBPP) housing scheme in Lebuh Quee on Thursday, 21 June.
Chow said the state would purchase the units from the developer at cost price before proceeding with the RTO scheme.
He said the scheme would apply to two or three projects in the state, but said the state has yet to identify the projects in question.
"One might be in Mak Mandin on the mainland,"he said.
He said the units to be offered would be projects under state Housing Department or Penang Development Corporation (PDC).