Subsidized housing is one of the government-backed solutions that helps people achieve the dream of owning their own home. With more affordable prices and financial support from the government, this program has attracted significant interest.
However, in practice, many subsidized home owners face challenges such as declining income or job changes that affect their ability to keep up with mortgage payments. As a result, some choose to transfer their subsidized mortgage obligations to another party, a process commonly known as over credit.
Because this process involves strict legal and regulatory requirements, it often raises questions and requires careful understanding to ensure compliance. To avoid legal issues and financial loss, it is important to fully understand the subsidized home over-credit procedure. Read on for a complete explanation.
What Is Over Credit for Subsidized Housing?
Over credit for subsidized housing is the transfer of subsidized mortgage (KPR) repayment obligations from the original borrower to a new party. In this arrangement, the new borrower continues paying the remaining mortgage installments that were previously the responsibility of the first owner.
In simple terms, the house is not sold in cash; instead, ownership is transferred along with the ongoing mortgage. Unlike non-subsidized homes, subsidized housing has unique characteristics because it receives government support—such as low interest rates, down-payment assistance, and regulated selling prices.
Therefore, transferring a subsidized home cannot be treated the same as a standard property sale. Each over-credit transaction must comply with applicable regulations. In practice, over credit often occurs due to relocation, changes in financial circumstances, or other urgent personal needs.
Is Over Credit for Subsidized Housing Allowed?
In principle, a subsidized mortgage takeover can be carried out, but it must meet specific requirements, including ownership holding periods and eligibility criteria for subsidized housing recipients. The government and banks do not allow unrestricted transfers, as the program is designed to help people who genuinely need housing.
One key requirement is the minimum ownership period. During this waiting period, owners are not allowed to transfer their subsidized homes. This rule ensures that subsidized housing is used as a residence rather than for short-term investment or speculation.
In addition, the recipient of the over credit must also qualify as an eligible low-income household (MBR). Not everyone can receive the transfer. If these criteria are not met, the bank has the right to reject the over-credit process—even if both parties have reached a private agreement.
Regulations Governing Subsidized Housing Over Credit
According to BP Tapera Regulation No. 9 of 2021, subsidized housing cannot be freely transferred. Ownership transfers are only permitted under certain conditions, such as inheritance, after the home has been occupied for at least five years for landed houses or twenty years for apartment units, or for the purpose of resolving problematic financing by FLPP-funding banks.
Even so, subsidized home owners are not allowed to conduct over credit—whether informally or through banks—without following the applicable regulations. Ownership transfers are only permitted to parties who meet the low-income household criteria and must follow government-approved mechanisms.
These provisions are also reinforced by Minister of Public Works and Housing Regulation (Permen PUPR) No. 35 of 2021, which states that subsidized housing transfers must be handled by authorized institutions.
How to Transfer a Subsidized Home Mortgage (Over Credit)
The over-credit process for subsidized housing must follow clear and lawful procedures. Below are the main methods you should understand:
Over Credit Through the Original Bank
Transferring a subsidized mortgage through the original lending bank is the safest option, as it directly involves the bank that issued the mortgage. The original borrower submits an over-credit request, and the bank evaluates the prospective new borrower.
This assessment includes reviewing identity documents, income, and repayment capacity. If approved, the bank processes the transfer through a new credit agreement or an adjusted contract. After completion, all repayment obligations officially shift to the new borrower, while the original borrower is released from responsibility with full legal certainty.
Interbank Over Credit (Bank-to-Bank Transfer)
Interbank over credit occurs when the mortgage is transferred from the original bank to a new bank. This process includes settling the remaining loan balance at the initial bank, followed by a new credit assessment by the receiving bank—similar to a standard mortgage application.
If approved, the new bank takes over the financing. However, this process requires approval from all related parties and must still comply with subsidized housing regulations, as not all banks offer subsidized mortgage programs. Clear coordination between banks is essential to ensure regulatory compliance.
By fully understanding the definition, regulations, and procedures of subsidized housing over credit, you can make informed decisions and ensure a safe and legally valid transaction.
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