MOF @ LTV ruling Q&A

Q : The BNM circular said "new housing loan extended... ", what
does the word "extended" means ?
A : The word extended means all loans approved on 3rd November 2010 is
subjected to the new LTV ruling (irrespective of submission date).

Q : What about refinancing with or without top up loan? Is it bound by
this circular?
A : All refinancing inclusive of top up loan so long it is the third property is
subjected to the new LTV ruling.

Q : What about projects with 2 SPA (one for property and
one for renovation or for car park). Are both agreements subject to
this 70% guide?
A : Yes, both are subjected to the new LTV ruling.

Q : Is it still possible to use FD pledge method to increase margin for
loans for third property?
A : No, FD pledge is not the same tenor as loan tenor.

Q : Any guideline to define "on best effort basis" as per BNM? To what
level of details should we be doing?
A : “On best effort basis” is up to the point of exhausting all avenues to
determine whether the loan is for third property.

Q : What type of housing loans are affected by the new LTV ruling ?
A : The identification of such Housing Loans are as follows :
i) In CCH are those facilities with pre-fix HLFNPRSR (priority sector),
HLFNNNPS (non priority sector) and STLNFNCE (staff Housing Loan).
ii) For applicants who are government servant - refer to salary slip & look
out for Government Housing Loan deduction
iii) For applicants with Housing Loan as employment benefit - refer to the
salary slip & look out for Housing Loan deduction.

Q : Are cases submitted before 3rd November 2010 and those pending
documents and appeals but approved on 3rd November 2010 affected
by the new LTV ruling?
A : The new LTV ruling is applicable to ALL housing loans approved from 3rd November 2010. Pending cases before 3rd November 2010 but approved on 3rd November 2010 will also be subjected to the new LTV ruling. Appeal cases (higher MOA, reinstatement and decline appeal), will also be subject to the new guideline.

Q : What is the treatment for joint accounts ?
A : For joint account housing loans, each joint account holder shall be
deemed to have one account, eg. in the case of a joint housing loan
account that is held by two borrowers, each borrower will be deemed to
have one(1) outstanding housing loan account. The same principles apply
if the borrower has other joint housing loan accounts with other borrowers.

E.g. husband & wife where husband has three housing loans in CCH and
wife has only one housing loan in CCH. If they apply a new housing loan
under joint names, then the new LTV ruling is applicable. However, if loan
is applied under wife's name alone, then new LTV ruling is not applicable.
The key word is BORROWER.

Q : What about financing of MRTA/GMTA ?
A : Financing for MRTA/GMTA shall be excluded from the computation of
MOA. So, for cases that falls under max MOA 70%, we can still finance
70%+MRTA + Legal Fee + Valuation Fee.

Q : How about additional cost for renovation and add-on fixtures ?
A : Property value shall include the renovation and add on fixtures and the
TOTAL purchase price shall be subject to the new LTV ruling for 3rd
property.

Q : How about properties with commercial titles such as service
apartments and SOHO ?
A : Service apartments and SOHO (Small Office Home Office) are considered
for residential dwelling purposes, hence, are subjected to the new LTV
ruling.

Q : How about companies buying residential properties and taking up a
loan ?
A : Companies are considered non-individuals and buying residential
properties and applying loans are subject to the new LTV ruling. The key
word is RESIDENTIAL properties. In this regard, applying for TL loans is
also considered affected by the new LTV ruling.

Q : What about financing of more than 2 properties under 1
CA/application?

A Yes, the new LTV ruling applies.