The government will open two schemes in November, named “Help to Build” and “Help to Buy”, to help families raise the down payment or equity needed to secure housing, Housing Minister Dr. Abdulla Muththalib has said.
According to the minister, the biggest difficulty many families face in owning a home is not the monthly loan instalment but raising the down payment or equity that banks require up front. The grant programmes will therefore be carried out under President Dr. Muizzu’s housing policy.
Agreements for the schemes were signed on 18 October with four financial institutions: Bank of Maldives, Maldives Islamic Bank, HDFC and MFLC.
Citing a study carried out with the assistance of the World Bank, the minister noted that more than half of the households surveyed had no savings at all. For example, a family saving MVR 3,000 a month would need 10 years to raise the 20 percent equity required to buy a flat worth MVR 2 million. The government’s schemes will ease that burden, he said.
The “Help to Build” scheme is aimed at people who own land but cannot afford to build a home on it. It will provide a grant of up to MVR 200,000, which is the 20 percent equity required for a loan of MVR 1 million. In the first phase, the scheme is open to Malé and inhabited islands in the atolls. Where several heirs build on a single plot in Malé, each owner will receive MVR 200,000, up to a total of MVR 1 million.
The second scheme, “Help to Buy”, is aimed at first-time home buyers. Under it, the government will pay up to MVR 250,000 directly to the developer towards homes priced at MVR 1.5 million built by private developers on islands in the atolls. This will cut the down payment a family must pay from MVR 300,000 to MVR 50,000.
Although the assistance is a grant that does not have to be repaid, homes obtained under the schemes cannot be sold for 20 years. This condition is intended to ensure families have permanent housing.
The ministry plans to publish the eligibility criteria and application details next month, and has asked the public to get their documents ready in the meantime.
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