Construction ministry outlines mortgage financing for low-cost homes

By NYAN HLAING LYNN | FRONTIER

YANGON — The Pyidaungsu Hluttaw has voted to approve a K189 billion ($142 million) overseas development loan from the Japan International Cooperation Agency to finance nearly 12,000 affordable dwellings ahead of the 2020 elections.

Tuesday’s vote came shortly after U Kyaw Lin, the permanent secretary of the Ministry of Construction, outlined eligibility for the scheme, which will see the construction of 405 residential buildings across Yangon, Ayeyarwady, Magway and Sagaing regions.

Potential homeowners will have to pay 20 percent of the dwelling’s cost and demonstrate their earnings are high enough to pay back 8.5 percent mortgages, brokered through private banks, at a 10-15 year term and at a rate not exceeding a third of monthly household income.

“A family that will buy a flat must pay K100,000 a month. So, the family’s total monthly income must be K300,000,” Kyaw Lin explained to lawmakers, adding that an assortment of housing options between 300-1,200 square feet would be available under the scheme.

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The overseas development loan from JICA, fixed at a 0.001 percent interest rate, will mature in 2058. The parliament’s joint sitting swiftly approved the loan yesterday, with 450 yes votes and four lawmakers objecting.

Mortgages for the scheme will also be made available through the government-backed Construction and Housing Development Bank.

The Ministry of Construction expects the dwellings to be completed by the end of the 2019-20 fiscal year.

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