Rumah Mesra Rakyat: A Comprehensive Guide to Affordable Housing

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See also: A Complete Guide on PPAM

It is in every Malaysian’s dream to own a home. Correction, it is everyone’s dream to own a home. Regardless of where you’re from, purchasing your very first home marks your ascension into freedom, and places you a tier higher in the ranks of adulthood. 

A home is a symbol of many things – A private space, a place where loving and long-lasting memories are made, a place of solace to name a few. Most importantly, your own home, not just any home, is a source of constant in your life. When everything else seems to be falling apart and nothing feels well, you can count on your place to be there for you. Put simply, we all dream of having our own place, for good reasons.

Yet the sad truth about owning a home is… Not everyone has the financial capacity to afford one. And some of us may spend the rest of our lives living in our parents’ home, never knowing what it feels like to earn a personal set of keys to our very own abode.

Are we capable of owning a house?

In fact, there are a number of Malaysian out there who are unable to afford a home and are forced to be homeless for a variety of reasons, with unemployment being the biggest root cause. To show just how prevalent homelessness is in Malaysia these days, a survey conducted by Kuala Lumpur City Council, better known as DBKL, found that approximately 1500 – 2000 Malaysians were reported to be homeless in 2016, a threefold increase compared to the figure reported in 2014. To date, it is presumed that the figure continues to grow and it is unknown if the figure reported is comprehensive, to say the least, meaning there could be more homeless folks at large who are still undocumented in the reports.

Ultimately, our stance on the matter remains clear. The number of homeless individuals has grown over the years, and it doesn’t seem like it will stop anytime soon, what more when we consider MCO from the year before. As of Dec 2020, the Department of Statistics Malaysia (DOSM) has recorded a total unemployment rate of 4.8%, or 772900 Malaysians left jobless in MCO’s wake, a 27-year high for the country. Not the prettiest moment in our beloved country sadly.

Compared to the homeless folks out there, living in an inherited, or what we like to call a hand-me-down home isn’t so bad after all, especially when one considers the fact that they have a roof and a place to turn in for the night. Still, that doesn’t stop many of us from dreaming of having our own home. Plus, with issues like leasing or mortgage on the side, inheriting a home from our parents doesn’t necessarily make us impervious to being evicted. Even if you’re a Young who lives in Tyersall Park Crazy Rich Asian style, which by the way, was also returned to the government by the end of the trilogy, by hook or by crook, there comes a time where each and every one of us must simply step out and purchase our first home.

For the fortunate and the prepared, purchasing your own home can be a little less frustrating. You may go through the painstaking effort of having your housing loan request denied several times, but eventually, with a little hardwork, you’ll get there . Either way, the journey to affording one’s own home can be difficult but fulfilling nonetheless.

Unfortunately, the same can’t be said for the struggling Malaysian households. Which is where Rumah Mesra Rakyat steps in.

Let’s talk Rumah Mesra Rakyat, SPNB, and B40

Just a little prefacing, we’re going to do things a little differently today. Instead of focusing on the bigger picture like SPNB and B40 first, we’d like to start by talking about the heart of the article, which is Rumah Mesra Rakyat. That way, you’ll be able to understand how it all clicks together.

The sections from here on out can be very confusing for the average Malaysians to understand due to the technicality and minutest information involved. That said, it is not rocket science and with a little explanation and help from our end, you should be able to grasp the basics of Rumah Mesra Rakyat very quickly. So without further ado, let us get right into it.

What is Rumah Mesra Rakyat?

Rumah Mesra Rakyat (RMR) is a program established by SPNB in 2002 to help low-income earning households obtain a comfortable home. It should be noted that low-income earning households in this context generally refers to fishermen and farmers, though the definition isn’t solely limited to agricultural labourers. Meanwhile, the household referred here includes:

1. Poverty-stricken families
2. Families who own land, but are unable to build a newer, more comfortable home for themselves and are forced into poor living conditions as a result of financial restraints or natural disasters.

Originally named Skim Rumah Keluarga Nelayan Terengganu, the program was intended to benefit the low-income fishing community around the coastal areas of Terengganu by helping them build homes over their land. Later on, however, the program was renamed Rumah Mesra Rakyat to create a wider outreach to those who seek similar aid.

In turn, this would spur Rumah Mesra Rakyat to build affordable housing units for the underprivileged and the struggling on a larger scale, which included expanding its program to include East Malaysia in 2005. As of November 2019, it has been reported that Rumah Mesra Rakyat has built 46,420 homes for underprivileged Malaysians since its inception, a remarkable and commendable achievement for the government and the country, and intends to develop another 3000 units in 2021.

Now that we’ve discussed the becoming of Rumah Mesra Rakyat, it’s time to meet the brains behind this life-changing program – SPNB.

SPNB

SPNB or Syarikat Perumahan Negara Berhad, is a national housing development agency founded by the Minister of Finance Incorporated in 1997. Since August 2018 however, it has been spearheaded by the Ministry of Housing and Local Government, or Kementerian Perumahan dan Kerajaan Tempatan (KPKT).

The agency’s goal is simple – To provide high quality yet affordable houses for Malaysians via the aforementioned Rumah Mesra Rakyat. In fact, the agency has the phrase “Your residence, our responsibility” as its motto, a personal reminder to itself to always remain a stalwart supporter to the cause. Apart from that, it also oversees the rehabilitation of abandoned home projects throughout Malaysia, with its latest focus being the amendment of Act 118 under the Housing Development (Control Licensing) Act 1996, which states that stricter actions will be taken against developers associated with any abandoned home projects.

Next, regarding B40.

The Connection: B40, SPNB and Rumah Mesra Rakyat

Let’s have a quick recap about Rumah Mesra Rakyat and SPNB before we dive into B40. So what is Rumah Mesra Rakyat and how does it relate to SPNB?

If your answer is more or less the following – Rumah Mesra Rakyat is a program that is established by SPNB to provide affordable housing to struggling Malaysian households, you’re right on track.

With that out of the way, this raises several questions in mind. What is B40? How does it relate to struggling households? 

For starters, in order to understand what B40 is, you must first realize that the Malaysian government groups its citizens into three different categories based on their monthly income, which are:

• T20, or Top 20% (Those earning between RM10961 – RM15040 and beyond)
• M40, or Middle 40% (Those earning between RM4850 – RM10959)
• B40, or Bottom 40% (Those earning between anything less than RM2500 – RM4849)

Chances are, if you are an average Malaysian stuck to your run-of-the-mill, 9-5 desk job, you would most likely fall within the B40 or M40 category. Those who are a high-ranking CEO or manager working at a reputable company may find themselves falling within the higher echelons of M40, or T20 instead.

At first glance, the classification may feel redundant, as it seems to “divide” Malaysians based on their monthly earnings, which leads to unnecessary “division” in the society. In truth, the classification system is so much more than that and helps more than one thinks, namely:

•  It allows the government to efficiently allocate aid packages to the needy in tough times i.e.: Kita Prihatin Malaysia 2020
•  It ensures that taxpayers pay their annual taxes proportionate to their annual income in a fair and just manner
• More importantly, in the interest of our discussion, it allows the government to determine the group of individuals eligible for housing schemes of any kind, think RUMAWIP, First Home Scheme, and Rumah Mesra Rakyat

Again, Rumah Mesra Rakyat’s purpose is to provide affordable housing to struggling households. The struggling, in this case, refers to individuals who fall under the lower tier of B40.

Put simply… If your monthly household income is <RM3000, meaning even after the following has been taken into consideration:

• Allowance,
• Self-employed income,
• Overtime pay,
• Commissions,
• Bonuses.

You fall under the lower tier of B40 and automatically qualify for Rumah Mesra Rakyat. Another thing to note is the word household here implies that the individual must be married. 

Additionally, there are four subgroups for each income classification group. We’ve talked about B40’s salary range a few lines above, now it’s time to take an in-depth look at the subgroups:

1. B1 (<RM2500/per month)
2. B2 (RM2501 – RM 3169/per month)
3. B3 (RM3170 – RM 3969/per month)
4. B4 (RM3970 – RM4849/per month)

The key is to realize that only selected B40 subgroups are entitled to Rumah Mesra Rakyat. Also, since Rumah Mesra Rakyat only concerns individuals under B40, we won’t be talking about the other income classification groups heavily, though interested individuals can learn more about Malaysia’s income classification groups here.

To summarize the whole talk about B40 and Rumah Mesra Rakyat,

• If your monthly household income is <RM3000, you are eligible for Rumah Mesra Rakyat.
• If your monthly household income is >RM3000 and you still fall under B40, the Rumah Mesra Rakyat does not apply to you.

Now that we’ve gotten the lengthy basics out of the way, it’s time to finally talk about the perks of Rumah Mesra Rakyat.

What Rumah Mesra Rakyat offers

Rumah Mesra Rakyat is a program established by SPNB to help struggling households attain a comfortable home of their own.

And that’s a good thing because that means struggling households have means of fulfilling their home-owning dreams. Sadly, many struggling Malaysian households are unaware of this, and some are sceptical of the program too. Therefore, to alleviate some of the preconceived notions, we’ve decided to talk about the perks of Rumah Mesra Rakyat in hopes they may put some of your concerns to rest.

Rumah Mesra Rakyat infographic. Picture courtesy of SPNB.

For readability purposes, we decided to attach an image from SPNB detailing the range of offers Rumah Mesra Rakyat provides.

For starters, all houses built under Rumah Mesra Rakyat are broken down into 3 categories dependent on their land size and location:

• 3600 sqft, for those located within West Malaysia,
• 3400 sqft, for those located in the coastal areas of West Malaysia,
• 3200 sqft, for those located in East Malaysia.

Meanwhile, Rumah Mesra Rakyat houses come with the following amenities:

• A single-story house,
  • 3 bedrooms & 2 bathrooms

 

Concept arts detailing the floorplans and likely product following construction in 3600, 3400, 3200 sqft respectively. Picture courtesy of SPNB.

All Rumah Mesra Rakyat houses fetch a starting price of RM75,000, while houses in coastal areas of Peninsular Malaysia fetch RM85,000 instead.

Here’s the good news, the government is willing to subsidize RM20,000 of the cost, though the amount only applies to the construction phase.

Assuming we go with the standard of RM75,000, that’s a little higher than ¼ of the cost, which means struggling households only need to pay 70% of the remaining cost, at their own pace, in accordance with the conditions listed by both SPNB and the financial institution administering the loan of course.

Other points worth paying attention to is that payments are made via SPNB’s preferred channels, which we will get into below. Meanwhile, any drafted agreements obtained for an Rumah Mesra Rakyat housing program must come from an SPNB-registered law firm.

On a final note, one of our biggest nightmares when it comes to purchasing a home is learning that the constructors/contractors/parties responsible for building your home suddenly abandon ship (or construction). Households registered under Rumah Mesra Rakyat however need not worry about such instances, as all parties involved go through a tight vetting process before registering under SPNB.

All in all, the process of applying for a Rumah Mesra Rakyat home is pretty self-explanatory.

Now let’s get into the application process.

Applying for Rumah Mesra Rakyat 

Eligibility Criteria

We briefly talked about eligibility in Rumah Mesra Rakyat, with one of it being that the household income must be <RM3000 and fall under B40. That, however, is merely one of the many requirements needed to qualify for the program. In fact, there is a long list of criteria that applicants should take note of:

• Be of Malaysian nationality
• Applicants must be aged 18 and above
  •  For West Malaysian applicants aged 42 and above, a second applicant aged between 18-42 will be required
  •  Meanwhile, for applicants aged 38 and above living in East Malaysia or coastal areas, a second applicant aged between 18-38 will be required
•  Monthly income <RM3000
• The applicant or spouse must not own any property
• If the applicant or spouse possesses a property, said property must be considered dilapidated or rundown, or a house that is in a poor living condition or beyond repair
• Proposed land on which the house is built must be free from any mortgage/leasing/financial-related issues
• Assuming the proposed land does not belong to the applicant, proper approval must be obtained from the landowner before any construction can take place
• The proposed land has to be at least 3,600 sqft (for those residing in Peninsular Malaysia. For other areas like East Malaysia or coastal areas, refer to the infographic above
• The housing will be subjected to the financing budget as dictated by SPNB

Application process and requirements

Assuming all of the criteria above have been met, individuals begin applying for Rumah Mesra Rakyat, which is a simple and clear-cut process that can be completed online. That said, the final form needs to be submitted in person. Here are the steps involved:

1. Applicants register an account under SPNB
2. A password meant for the account will be generated by SPNB’s system
3. Applicants can then login to SPNB and proceed to fill up the Rumah Mesra Rakyat form online
   •  Applicants preferring a physical form may obtain it from the nearest SPNB branch office to them instead
4. Upon completion of the form, applicants can submit the final form along with a list of documents as listed by SPNB

Speaking of documents, here is a list of documents you’ll need:

• A copy of the applicant and the spouse’s NRIC
• A copy of the landowner’s NRIC
• A copy of the second applicant’s NRIC (if applicable)
• A copy of the latest land ownership grant or leases
• A copy of the official search certificate from the Land Office, to ensure that the information about the land is accurately reported,
• Income statement from applicant and spouse dated to the latest 3 months
  • Approval by village head, leader or a Class A leader required
• A verification letter stating the applicant and spouse do not own a property/own a rundown property
  • Approval by village head, leader or a Class A professional officer required
• Letter of approval from landowner consenting to the construction of Rumah Mesra Rakyat home on their land
• A copy of applicant’s marriage certificate
• Printed site report with images

In addition to that:

• SPNB has the right to request further documents from the applicant from time to time
• SPNB will provide the Oath of Allegiance Letter and Photo Site Visit Form
• Any requested information pertaining to the second applicant, if any, can and will be used for insurance-checking or payment-related purposes

Final process

Once all the necessary paperwork has been verified and completed, the applicants will be required to go through one final step within the application process before construction can finally begin:

• Applicants will have to prepare a plan detailing the flow of the construction i.e.: Where do construction materials enter, how are construction materials disposed of?
• Providing water and electricity supply for contractors,
• Provide utility connection upon completion of construction, basically piping and electrical wiring works,
• Lastly, ensure applicants possess a bank account that is compatible with SPNB’s preferred payment channels, which are,
  • Any SPNB branches,
  • BSN (HQ or branch offices)
  • Post Office aka PosMalaysia,
  • JOMPAY,
  • BSN Agents,
  • Any cash deposit machines available at BSN branches.

And that folks, is pretty much the A-Z of Rumah Mesra Rakyat for struggling households.

The process can be a little painstaking, but it is all to err on the side of caution and ensure that all relevant parties can get a night’s rest after all that paperwork and money. The most important point to realize from all this is the Malaysian government wishes to help struggling households build a shelter over their heads. It can be difficult to purchase homes, but one additional housing program means the benefit of another group of struggling Malaysians out there.

If you would like to learn more about Rumah Mesra Rakyat, SPNB and the other programs that the agency offers, feel free to head over to SPNB official site. 

Summary

Rumah Mesra Rakyat is a program established by SPNB to help struggling Malaysian households obtain a comfortable yet affordable home for themselves and their loved ones. Back then, it has always been difficult for struggling households to purchase a home. Now, however, the process has been made easier thanks to SPNB. With a little patience and hanging in there, perhaps the dream of owning a home, even for struggling households, can be a dream come true after all.

FAQs

Who is eligible for Rumah Mesra Rakyat?

Individuals possessing the following criteria can apply for Rumah Mesra Rakyat:

• Malaysian nationality,
• Aged 18 and above,
• Monthly household income <RM3,000,
• Applicant and spouse does not own any property / possesses a rundown house,
• Possess a land that is either 3600/3400/3200 sqft in Peninsular Malaysia/Coastal Areas/East Malaysia respectively that is free from any mortgage/leasing/financial issues.
• If land belongs to another party, approval and consent must be obtained by said party before anything else.

Can I still build my house on a proposed land that doesn’t belong to me if the landowner is dead?

No, all landowners regardless of the proposed land and location, must be alive in order for the approval to be considered legitimate.

Can B40 singles apply for Rumah Mesra Rakyat too?

Unfortunately, the Rumah Mesra Rakyat program is applicable for households only, meaning the applicant must be married or have a family.

What is the subsidy amount provided by SPNB?

SPNB provides up to RM20,000 in subsidy for its Rumah Mesra Rakyat homes, though the value is strictly limited to construction only.

Will Rumah Mesra Rakyat provide or prepare any utilities throughout and after construction?

No. Any utilities pertaining to construction and the completion of it falls to the applicants to provide.

Can my application for Rumah Mesra Rakyat be rejected?

If you do not meet the criteria listed within the program, yes. Several criteria that you may wish to take note to ensure a smooth-sailing process are as follows:

• Household income >RM3000,
• Applicant or spouse already possesses a home,
• Proposed location is not suitable,
• Problems/roadblocks regarding title grant.

How long will the approval take?

Initial proposal generally takes 3 months to process. Approvals, on the other hand, are generally dependent on the budget and slots allocated by the government annually. The earlier the applicant applies for Rumah Mesra Rakyat, the more likely they will stand a chance of building their own home. Meanwhile, the construction process that follows thereafter takes about 18 months to complete. To sum it simply, 3 months of review → Approval by SPNB (subjected to availability and budget allocated) → 18 months of construction.