Minister Ara Prepares Rules for 40-Year Tenor KPR Scheme

JAKARTA - Minister of Housing and Spatial Planning (PKP) Maruarar Sirait (Ara) stated that the government is preparing rules for a home ownership credit scheme (KPR) with a tenor of up to 40 years in accordance with President Prabowo Subianto's instructions.

Ara said the government is currently still conducting simulations and preparing various supporting rules before the long-term policy is officially announced to the public in the near future.

"We are preparing again. We are simulating, we are preparing again. Later, we will tell the public," said Ara when met after a meeting with Bank BSN President Director Alex Sofjan Noor, which discussed subsidized housing financing in Jakarta, Wednesday, May 13, reported by ANTARA.

He revealed that discussions related to the 40-year KPR scheme were still being carried out intensively, including through meetings held with related parties in the last few days.

According to Ara, the policy is a direct order from the President so that the government's focus is no longer discussing the concept, but ensuring that its implementation is effective and targeted.

"Finally, we met three days ago, Friday night, we (met) at night. Later, in time we will announce. (Policy plan) it is not for discussion, for implementation," he said.

The government, he continued, still listens to input from various parties in the housing ecosystem such as banks, developers, consumers, to the People's Housing Savings Management Agency (Tapera).

Ara emphasized that the 40-year tenor scheme will be optional, so that the public can still take a shorter tenor according to their respective abilities and needs.

He explained that the public still has the option of choosing a 10-year, 20-year, or 30-year tenor, so that the flexibility of installment payments remains a concern of the government in this policy.

According to Ara, long tenors are considered suitable for young people such as new civil servants and members of the TNI and Polri who are just starting their careers and need light installments.

He added that the scheme allows debtors to change the loan tenor in the middle of the installment period, so that people can still accelerate repayment according to their respective financial capabilities.

Ara also ensures that the public will be allowed to repay the loan faster if the financial condition is possible without being fully tied to the initial loan tenor.

Regarding joint discussions with the industry, Ara said the government would soon invite banks and developer associations to discuss the technical implementation of the KPR tenor policy of up to 40 years.

He said informal communication with various parties had actually taken place to ensure that the policy could be accepted by the entire national housing ecosystem.

According to Ara, the government is still in the stage of communication and a focused group discussion forum or FGD to absorb input before the final rules are announced to the public.

Ara assessed that the long-term tenor policy was a pro-people step because it aimed to reduce the monthly installment amount, so that people's access to home ownership would be easier and more affordable.

He emphasized that the government is now focusing on preparing mature implementation rules so that President Prabowo Subianto's noble goal of expanding access to affordable housing can run optimally and conducive.

"The (tenor) 40-year goal is only one, making it cheaper. That's right, so that the people are cheaper (to pay off), it's a noble goal. Well, we'll make the rules," said Ara.