By Property Hunter
clock 15-12-2021
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Home Purchasing Loan Guide for Civil Servants

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Purchasing your first home can be challenging, especially when there’s a high risk of  getting rejected by banks when applying for loans. Fortunately, for those working in the government sector, there are specific loans available for option. 


The government provides a scheme known as the Public Sector Home Financing Board(LPPSA) for civil servants. This scheme helps civil servants to fill in the remaining amount that is not covered by the applied home loan. It’s important that these first home buyers take note that not all developments are covered by the scheme. 



Properties that go under the category of commercial titles are not covered as this scheme prioritizes residential titled and government owned properties. Thus, it is important to check which properties fall under this loan scheme before pursuing the purchase of that house you’ve been eyeing.



However, to get this loan, there are a few criterias that one must fulfill. For example, even though you could be working with the government, LPPSA requires you to hold a permanent position for a year, provided with a letter of employment confirmation from the government. 



Loan



One of the benefits LPPSA provides is that they grant all civil servants a 100% full loan, so you won’t have to worry about any remaining costs. Although such benefits are granted, it takes a few other terms for one to be eligible. 



To be eligible for this scheme, there is a certain percentage of current salary and any fixed allowances that you must not exceed:





  • First home loan - 60%


  • Second home loan - 50%




Debt Commitment 



Your debt commitments every month is one of the important criterias to be eligible for the scheme. Similar to the required loan percentage, there is a certain percentage set for your commitments as well you must not exceed.





  • Net income - 80%


  • Gross income - 20%




As LPPSA is made dedicated to civil servants, you can now help by reducing the rent percentage and start owning your own property. You can find out more about LPPSA by visiting www.lppsa.gov.my.



 






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