The Housing Credit Guarantee Scheme (HCGS) is a financial assistance program that provides guarantees to lenders in order to encourage them to offer mortgages to homebuyers who may not meet the standard lending criteria. The scheme is designed to help those who may struggle to obtain a mortgage due to factors such as a low income or a lack of savings.
Benefit of HCGS:
Financing of up to 110% or RM500,000 (whichever is lower) for completed or under-construction properties
No downpayment required
Affordable financing up to 35 years or age 70 whichever is earlier
Joint applications allowed with immediate family members
Available under Conventional Loan and Islamic Financing
Under the HCGS, the government provides a partial guarantee to lenders for a portion of the mortgage. This reduces the risk for the lender, making it easier for them to approve the mortgage application. The guarantee is only available for the purchase of a new home, and the property must be the borrower's primary residence.
The scheme is designed to help first-time homebuyers, but it is available to anyone who meets the eligibility criteria. To be eligible, the borrower must have a good credit score and be able to demonstrate that they can afford the monthly mortgage payments. The scheme is administered by the Ministry of Housing, Communities and Local Government.
The amount of the guarantee provided by the government varies depending on the lender and the specific mortgage product. The guarantee is typically for a fixed percentage of the mortgage, which is determined by the lender.
It is important to note that the HCGS does not provide any financial assistance directly to the borrower. Instead, it simply provides a guarantee to the lender, which may make it easier for the borrower to obtain a mortgage.
With HCGS, the government, through Syarikat Jaminan Kredit Perumahan Bhd, has agreed to provide financing guarantees of up to RM5 billion in loan value aimed at benefitting 20,000 borrowers.
It is the intention of the Government to further assist particularly the first time house buyers that do not have steady income such as gig and freelance workers, independent business owners, and small traders or entrepreneurs.
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