Given how affordable properties in major cities are becoming increasingly scarce, the Government created an initiative, known as PPAM (formerly known as PPA1M), to help overcome this issue. See more on PPAM below.
What is PPAM?
The Perumahan Penjawat Awam Malaysia, Jabatan Perumahan Negara (PPAM) scheme was designed and developed to help government servants, particularly young, middle-income civil employees, as affordable housing scheme in quality location for a price lower than the typical market price. The PPAM programme intends to build multiple projects across Malaysia and enable government employees to own residential property. PPAM is an affordable homeownership scheme for public service workers in the low to medium income bracket.
The Government first launched eight years ago in 2013, offering residential units with attractive prices from our property developer ranging from RM90,000 to RM300,000 for the civil workers. The Government aims to complete building as many as 126,000 affordable homes around the country by 2020. To execute their plans of supplying reasonably priced homes in major cities, the Government encouraged private developers to participate in the project by subsidising them as much as RM25,000 to RM35,000. According to Housing and Local Government Minister, Datuk Zuraida Kamaruddin, she stated that RM310 million more has been allocated to build PPAM units this year (2020).
As the name of the programme itself is a giveaway, one must first and foremost be a civil servant working in either the Federal Government, a State Government or Authority, a Local Authority, or a Federal or State Statutory Body. To apply for the PPAM, the applicant must:
Be a Malaysian citizen and reside in Malaysia;
Have a monthly income of RM10,000 or lower
Be stationed for work in or near the housing area applied for;
Still, be in the workforce or be a retiree with a pension;
Not be declared bankrupt; and
Not already own a government housing unit in the same area applied for.
Preference is given to individuals who do not own a property (i.e. priority is given to first-time homeowners).
Properties need to adhere to a set of regulations in order to qualify under the PPAM scheme. Some of them include:
Buyer must not rent out his or her home after acquiring it.
The property cannot be sold for the first ten years, except to the next of kin. However, one wishes to resell their unit before the ten-year-period is over, they must first obtain the Government’s permission to do so.
A 2% deposit must be paid upon signing the Sales and Purchase Agreement (SPA).
A unit sold to the buyer cannot be changed once the offer is confirmed.
Once an offer is made, buyers will have up to two months to secure their financing.
If I lost my job during the application?
One should know that their application for PPAM will be cancelled by default if the said individual is no longer an employee of the Government. If the said person had a government occupation during the time of PPAM application but subsequently lost their job at the time of the signing of the purchase agreement, they will no longer be deemed qualified. However, if the applicant passes away during the application process, the PPAM unit can be transferred to his/her spouse even if they did not register for the unit, provided that he or she is also a government servant.
PPAM’s Pros and Cons
Just like any other housing scheme, PPAM has its unique advantages and disadvantages. Let’s take a look at the benefits of buying a PPAM unit:
PPAM’s unit pricing is much lower compared to other housing schemes.
With RM300,000, you can acquire a spacious 1500 sq. ft. unit in Taman OUG under the PPAM schemes. Generally, market rates for apartments in the area range from RM350 000 to RM450 000, and that too for a much smaller unit (less than 1000 sq. ft). Comparing PPAM’s units with standard market-priced apartments, PPAM offers units with RM200 per sqft, whereas Taman OUG’s apartments are priced around RM390 per sqft. The major difference in terms of price per sq. ft and size makes PPAM the worthier deal.
Flat rate for all units.
Unlike typical commercial high-rise residences, you are free to choose a unit on any floor with your preferred facing direction/view without being charged extra. PPAM charges a flat rate across all units. That said, do bear in mind that the units are sold on a ‘first come, first serve’ basis.
The wide selection of home types.
Contrary to popular belief, PPAM does not offer only apartments. The programme includes various home types, including high-rise residences and landed properties such as townhouses and bungalows.
Live in close proximity to rapidly expanding neighbourhoods.
PPAM projects are built in areas that are highly likely to be developed over the next few years. Past PPAM project locations include Senai, Johor (30 minutes from Johor Bahru), Kulim, Kedah, Cheras, Kuala Lumpur, Kota Bahru, Kelantan and more.
First-time buyers are prioritised.
The PPAM project prioritizes government employees who are buying a house for the first time. That said, those with properties to their name are also encouraged to apply.
Here are some of the downsides to owning a PPAM unit:
Buyers are not allowed to out rent their units.
The main goal of PPAM is to help government servants and their children own property. Allowing applicants to buy and rent out their property would distort the intention of the PPAM scheme, turning it into a buy-and-rent business of sorts.
Buyers must wait for at least 10 years before re-selling.
The buyers of PPAM units must wait for at least ten years before they are able to sell their house, unless if they are selling to the next of kin. However, if the Government grants a PPAM unit owner permission, the owner may resell their unit before the ten-year-period is over.
Buyers will be blacklisted for a project they applied for and subsequently rejected.
Applicants who initially applied, then changed their minds and rejected their PPAM offer, will be blacklisted from said project. Nevertheless, applicants would only be blacklisted for the particular project for which they were offered and subsequently rejected. Applicants can still apply to other PPAM projects.
PPAM Buying Process?
Buying a PPAM unit is a fairly straightforward process. See below for the application guide:
Only upon successfully registering and verifying your account will you be able to view the list of projects. Browse the list of projects by using the ‘Project Status’ and ‘Project Location’ tabs. Pick the ongoing project(s) you wish to apply for. Note that you may apply to more than one project.
Birth certificate (applies to retiree child application).
Choose a project
Select the unit type of your choice. Each applicant is allowed to make a maximum of three applications at a time. In the case of a cancelled project application, the applicant may proceed to apply for a different project, provided the number of outstanding/active applications remains less than three. If the applicant’s spouse(who is also a government employee), receives an offer for a PPAM unit, the applicant is deemed ineligible and can no longer apply for a new project.
You are required to check your loan eligibility with Lembaga Pembiayaan Perumahan Sektor Awam (LPPSA) or with a conventional bank first before choosing a PPAM project. LPPSA is the statutory body responsible for managing public sector housing financing. The establishment of LPPSA, previously known as the Housing Loan Division (BPP) under the Ministry of Finance (MOF), came into full effect on 1 January 2016.
The voting is conducted on a ballot-basis. The applicants will be selected accordingly by the PPAM branch they applied to. As for those who were not selected, they will be included in the next round of voting.
Successful applicants will be notified via email and the offer will be displayed on the PPAM website.
Sales and Purchase Agreement (SPA)
You are required to review the contents of the Sales and Purchase Agreement (SPA) before signing the SPA.
Financing the unit
You are required to manage financing applications using government loans; applicants can obtain housing financing from the Public Sector Home Financing Board (LPPSA), conventional banks, government cooperatives or other recognized financial institutions. You will need to secure a loan approval within two months after signing the SPA.
The official handing-over of keys
Once the project receives the Certificate of Completion and Compliance (CCC), the keys and title deed will officially be handed over to you, making you a proud owner of a new PPAM residence.
For more information, you can refer to the user manual athttp://www.ppam.gov.my/themes/ppam-portal/assets/manual/pemohon.pdf.
Once you’ve submitted your application, you can head on over to the PPAM portal and check your application status. If your application status shows:
Complete or ‘Lengkap’.
Your submission to the Secretariat is successful and is pending further action. In the interim, applicants can print out a copy of their submitted form by clicking on the printer icon. Applicants are encouraged to check their application status often.
Waiting List or ‘Senarai Menunggu’.
Your submission has been reviewed and placed under the Waiting List. This may happen if the project is popular and has many applicants in line ahead of you. Applicants under this category can be offered a PPAM unit if other applicants who have received an offer choose to reject the project offer.
Offered or ‘Ditawarkan’.
The applicant has successfully been offered a project. Here, the applicant can either accept or reject the offer. If the applicant rejects the offer, they must provide a reason explaining their rejection.
Home ownership or ‘Pemilikan Rumah’.
The applicant receives the keys to the project; confirming the applicant’s ownership of the unit.
Offer Cancelled or ‘Tawaran Dibatalkan’.
The offer has been cancelled by the Secretariat for certain reasons, including suspicious or false information found in the form or the applicant no longer serving as a government employee.
Withdraw or ‘Tarik Diri’.
The applicant has withdrawn from their choice of project. This status only exists in the data migrated from the original system.
Application Cancelled or ‘Permohonan Dibatalkan.’
Incomplete applications by the end of the closing date will be cancelled by default.
Cancelled Project or ‘Projek Dibatalkan’.
The project has been terminated due to problems faced by the developer.
Next Voting or ‘Pengundian Seterusnya’.
Applicants who have applied for a project that has reached its application limit will see their status automatically change from Complete or ‘Lengkap’ to Next Voting or ‘Pengundian Seterusnya’. This application status indicates that the application has been moved to the next round of voting as the current voting is full.
S&P (Sales and Purchase).
This status indicates that the submission has been recorded by the developer for S&P dates and the type of applicant loan. The submissions are recorded to make certain that the developers complete the projects within the due date and to track the progress of purchasers.
Appeal for rejected application
Yes, you may appeal. However, this does not guarantee that a unit will be offered to you. If there are available units, then they may be offered to you. To appeal for a PPAM unit, please submit a complete application with your full name, identity card number and reasons for appealing by emailing [email protected].
PPAM projects are built in places with the highest housing demands from government employees. Most of the projects are located in close proximity to government offices and stations. This is great news for civil servants, especially for those who are married and have children, as they can live close to their workplace, together with their families and save time on travelling back and forth to work.
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