KUALA LUMPUR, Nov 15 — Government workers will be allowed to ignore existing loan repayment to income ratios when buying selected homes, Chief Secretary Tan Sri Ali Hamsa said today.
The previous circular issued by Putrajaya in 1994 mandated that combined repayments and wage garnishing schemes must leave civil servants with at least 40 per cent of their monthly pay.
Ali said that the new decision was made in order to avoid repayment issues from being an obstacle for civil servants who want to obtain homes under the 1Malaysia Civil Servants Housing Project (PPA1M).
“This is because housing is a basic need. So we have asked that housing be exempted when following this circular regarding their take home pay,” he told reporters here today.
“We are providing housing for the civil servants, and we don’t want loan eligibility to become an obstacle in that sense,” he added.
The change does not state a hard limit on how much of a civil servant’s monthly salary may now go towards servicing his debt, as this will be determined on an individual basis by a loan repayment unit.