Indonesian government releases home loan subsidies for low-income families

As well as free homes for 88,000 poor families via the Housing Financing Liquidity Facility

Cityscape of Jakarta, Indonesia at sunset. HaniSantosa/Shutterstock

On Friday, The Jakarta Post reported that the Indonesian government will provide new mortgage subsidies worth IDR1.5 trillion (USD98.4 million) for households affected by the COVID-19 outbreak. 

Starting 1st of April, the Ministry of Public Works and Housing said that around 175,000 low-income families will benefit from this new provision. They also expanded the wage ceiling for qualified individuals from IDR7 million for low-cost apartments and IDR4 million for landed houses to IDR8 million for all kinds of housing. 

“We hope that housing subsidies will help low-income households to acquire decent and affordable housing, especially in the difficult times of the COVID-19 pandemic,” said Eko “Heri” Djoeli Heripoerwanto, the infrastructure financing director general at the Ministry of Public Works and Housing. 

Heri clarified that the incentive would come in the form of down payment subsidies (SBUM) and interest rate subsidies (SSB) for loan instalments. Of the IDR1.5 trillion, around IDR700 billion will be allocated to the SBUM and IDR800 billion will be for SSB. 

This new provision is a portion of the IDR10.3 trillion stimulus package declared by the government to control the impact of the outbreak on household expenditure.  

More: Indonesia eyes second-term benefits to property sector

The home loan subsidies will enable low-income families to pay five percent annual mortgage interest rate instead of the present housing loan rate of nine to 10 percent, with a tenure of about 10 years. Citizens residing in West Papua and Papua provinces will pay a four percent yearly interest rate for a loan tenure of about 20 years. 

As for the outstanding interest rate differences, Heri said that the government will take care of it. They will also grant IDR4 million mortgage downpayment subsidy for low-income families who bought landed homes and IDR10 million for residents living in West Papua and Papua provinces. 

Among the public housing projects by the Ministry of Public Works and Housing that these low-income families can take advantage of is the Rumah Susun Masyarakat Berpenghasilan Rendah, Kabupaten Tulungagung, which happened to be the first recipient of the Special Recognition for Public Housing award at the 2019 Indonesia Property Awards. 

Aside from the 175,000 low-income families who would benefit from this new provision, the government will also give homes to 88,000 poor families via the Housing Financing Liquidity Facility, as well as to 67,000 families via its newly-introduced savings-based monetary support. 

“The government is making every possible effort to help low-income citizens to fulfil one of life’s basic needs, which is to have a home,” added Heri.  

Members of the Real Estate Indonesia also voiced out their support for the new stimulus package as the property industry mostly depends on subsidised housing schemes, which makes up for 50 percent of the sector’s revenue. 

Know of any award-worthy homes, condos, flats, or other real estate projects in Indonesia? Nominate them for the 6th Indonesia Property Awards on or before 23 June 2020! Simply visit for more details.