Government Decreases Housing Facility

The Ministry of Public Housing (Kemenpera) decreased funding for the Housing Finance Liquidity Facility (Fasilitas Likuiditas Pembiayaan Perumahan – FLPP) by 10 percent.  Until recently, the government provided 61.70 percent of FLPP funds, while banks provided 38.30 percent. Now, the government will pay for about 50% of FLPP's funding and the banking industry will fill the 10 percent gap in funding.

In addition, Kemenpera will reduce the FLPP interest rate from 10% to 7. Kemenpera predicts that reducing the FLPP interest rate will improve mortgage (KPR Sejahtera) financing by up to 20 percent, increasing the number of units purchased using the FLPP from 182.900 units to 219.500 units. Kemenpera's calculations are based on the assumption that houses are purchased for IDR 70 million, with a 10 percent advance payment and a IDR 63 million mortgage.

“The policy of lowering FLPP to seven percent, will boost  people’s buying capacity by up to 10 percent. Moreover, there is still a substantial need for FLPP funds based on the Mid-term National Development Plan (RPJMN) for 2010-2014,” said Sri Hartoyo, Deputy of Funding at Kemenpera, on Kemenpera’s website, Wednesday (8/2).

He also stated that Kemenpera is currently preparing new policies, in addition to reducing the FLPP interest rate and funding. These policies are aimed at motivating more people to use FLPP mortgages,which include fire and life insurance fees in the mortgage insurance.

Kemenpera is also implementing policies related to land certificate fee exemptions, land use designation permits (SIPPT), building permits (IMB), value-added taxes, electricity connections, electrical installation plans, and water connections.

Kemenpera will also provide infrastructure, facility, and utility (prasarana, sarana, dan utilitas – PSU) assistance, in the form of roads, drainage systems, drinking water networks, electricity networks, and garbage and waste disposal.

“A reimbursement system will be applied on PSU assistance programs to help developers build houses and lower housing prices,” he concluded.

FLPP 2012
During a hearing with Commission XI at the House, Wednesday (8/2), Sri Hartoyo stated that Kemenpera provides IDR 6,914 trillion of funding for FLPP. The FLPP funds will assist KPR Sejahtera funding for 219.500 houses that are dedicated for low-income people.

He stated that Kempenpera's target is to provide home financing 1.350.000 units for  low-income people between 2010-2014. Between October 2010 to December 2011, Kemenpera has financed 124.977 units, using a total of IDR 4,12 trillion of FLPP funds.

“Later, Kemenpera will keep on trying to lower the FLPP interest rate,” he concluded.

(hukumonline / Mahinda Arkyasa)