TEMPO.CO, Jakarta - The Jakarta government has allocated a Rp5.8 trillion for low-cost housing with no down payments. The budget would be used to subsidize down payments and mortgage liquidity.
"It would be called the House Ownership Funding Facility," the Jakarta Secretary Saefullah said on Thursday, October 11.
According to Saefullah, the budget would be allocated for, among others, subsidizing 20 percent of the down payment for the zero rupiah mortgage, with a maximum allocation of Rp90 million per house.
The subsidy is a government's intervention, since banks are unwilling to provide mortgage for house loans with interest rates below five percent.
Firdaus Ilyas from the Indonesia Corruption Watch, said that this program may cause future problems. Government administrations only have a 5-year term, while house loans have tenors of 15-20 years.
"Not to mention that the potential for bad loans after the five-year government ends," he said.
Another problem is the existing rule that is against local governments disbursing bailout funds on other parties' loans.
Government Regulation No.30/2011 on Regional Government Loans stipulates that regional revenues or assets owned by the local governments cannot be used as loan collaterals.
To clarify the subsidy issue, the Jakarta DPRD's Finance Commission will have a discussion with the Supreme Audit Agency (BPK) and Bank Indonesia (BI).