Second home loan for civil servants

New  Straits Times 7/2/2006

PUTRAJAYA,Mon- Civil servants who are victims of abandoned housing projects may now be eligible for a second full loan to purchase another house.

Under a new loan scheme, they could also be exempted from servicing the interest on their first loan.

Treasury secretary-general Datuk Seri Izzuddin Dali said the scheme would help ease the problems faced by civil servants who bought houses but could not move in as the projects were abandoned.

"The Treasury is formulating a system to help borrowers find a solution to their problem," he said in a circular.

He said paragraph 3.5 (loan condition), 12 (loan interest) and 16 (loan repayment) and several other clauses in some circulars would be amended to include the following conditions:

• Borrowers who cancelled their loans or had them cancelled by the Treasury due to abandoned house purchases can apply for another loan and will be considered borrowers for a first-asset purchase.

• Interest on a loan is exempted from the day of cancellation until the next payment voucher is issued when an abandoned project is revived, or on a date fixed by the Treasury.

• Borrowers for abandoned projects whose loans are cancelled are required to settle their remaining balance in a lump sum or installments.

Izzuddin said the definition of "abandoned projects" in the 1994 and 1995 circulars would also be amended to mean that "they are projects abandoned by developers certified by the Housing and Local Government Ministry or Survey and Mapping Department".

He said borrowers would be required to apply for the cancellation of loans or wait for the abandoned projects to be revived, although the timeframe would be determined by the Treasury.

For abandoned projects beyond revival, he said the loans would be automatically cancelled by the Treasury.