In an effort to improve the welfare of its people, since 2015 the Government of Indonesia has continued to promote the 1 million subsidized housing program. The purpose of implementing this program is none other than so that people with low incomes can enjoy decent housing at affordable selling prices. But do you know BFI friends, if there are some rules that must be obeyed by the people who have received this subsidized house so that these benefits can continue to be felt in the long term? Yep, in this article, the BFI Finance team provides an understanding of the rules that recipients of subsidized housing must obey, especially in the activity of renovating subsidized houses. Because if violated, there are sanctions that must be accepted, including the application of interest rates that follow market interest rates and fines with a certain nominal. Check out the explanation below.
Definition of Subsidized House
A subsidized house is a house whose selling price has been subsidized by the government so that it has an affordable selling price and can be obtained through conventional and sharia mortgage schemes. The target market of this subsidized house is low-income people to get decent housing at affordable prices.
Usually, subsidized houses have a selling price of under Rp. 200 million and have a relatively low fixed interest rate. In addition, debtors will also get a long tenor of up to 20 years. The government also exempts VAT (Value Added Tax) and insurance premiums for this subsidized house.
Subsidized Home Renovation Terms
Before deciding to renovate a subsidized house, understand the following six rules that must be obeyed.
1. Reporting to the Bank First
Before you execute a subsidized house renovation activity, it's a good idea to inform the bank where your mortgage is located. Explain what parts will be renovated, whether it is a minor or major renovation.
2. Massive Renovation Can Be Done After 5 Years of Installment
You need to pay attention, there are two types of renovations that are allowed for subsidized houses, namely large house renovations or lighthouse renovations. If you decide to do a massive subsidized house renovation, then you have to wait up to 5 years from the start of your initial installment period. Included in the major renovations are:
The rule is that as long as the debtor has not entered the 5th year of ownership of the subsidized house, the debtor is prohibited from changing the front of the house, including the construction of a two-story house. After the 5th year, then the debtor has the option to remodel the subsidized housing on a large scale.
Does not change the facade
In addition to not being allowed to build 2 floors as long as they have not entered 5 years of ownership, the debtor is also not allowed to change the facade that has been set by the developer. The facade is the outside of the house including the design and quality of the materials used to build the house. Usually, the developer will generalize the facade design of the subsidized house, so it will look uniform. For this reason, the rule not to change the facade for the first 5 years applies.
3. Can Do Light Home Renovations
It's okay to renovate a subsidized house before 5 years of ownership. However, make sure the type of renovation of your home is classified as a minor or light home renovation. Examples of home renovations that are allowed before 5 years of ownership are:
Having a leaky roof is indeed a very disturbing comfort. If not repaired immediately it will cause more severe damage and of course cause discomfort. Therefore, the developer allows renovation of the house if a leaky roof is found, without having to wait 5 years.
If you find your walls are cracked and cause water marks when it rains, you can also repair them before 5 years of ownership. Not only covering wall cracks, you can also repaint parts of the house that you feel need to be changed.
Creating a House Fence
To feel safer, you can renovate the subsidized house by adding a fence in front of the house. You can use all types of fences ranging from stainless or cast.
Adding Canopy on Front or Backyard
You can also add a canopy in the front yard or at the back of the house to protect it from the hot sun and rain. The type of canopy that you can choose is the type of wood, glass, spandex, alderon, and so on. There are no exceptions to the type of canopy that may be erected.
Change the Size and Position of the Septic tank
Not only related to the design of the house but you are also allowed to enlarge the septic tank if it is too small. In fact, you can move the position of the septic tank from where it started, as long as it doesn't interfere with the comfort of neighbors and developer rules.
4. Can use the rest of the land
Each subsidized house usually has residual land that can be transformed into a useful place. You can find the remaining land at the back or front of the house. Take advantage of the vacant land, for example, to build additional kitchens, bedrooms, bathrooms, warehouses, or gardens to beautify the appearance of the house.
It must be noted that the utilization of the vacant land does not cross the boundaries between neighbors and the public roads that have been determined.
5. Not allowed to expand the land
The land area regulation regulated by the government for this subsidized house is a minimum of 60 square meters and a maximum of 200 square meters. Meanwhile, the minimum building area is 21 square meters and the maximum is 36 square meters. Try to stay within the rules that have been set by the government. If the debtor is found to be in violation, there is a possibility that the ownership of the subsidized house will be revoked.
6. Not Changing Property for Commercial Needs (For Sale and Rent)
The last and no less important rule is not to make subsidized houses a place for commercial or business activities. Commercial activities here such as making subsidized houses as cafes, stalls, studios, and other similar activities. In addition, as long as 5 years of ownership have not been reached, debtors are prohibited from renting and selling subsidized houses to second parties.
Tips For Subsidized Home Renovations
Check out the four tips below so that your subsidized home renovation activities run smoothly:
1. Home Installment Payments Must Be Smooth
Renovating subsidized homes costs a lot of money. This condition does not necessarily hinder your regular mortgage payments. Paying installments on time will affect a good credit history. So, if you want to apply for a loan at another financial institution, there is still a high chance of being re-approved.
2. Do not violate the rules that have been set by the government
Continue to follow the rules determined by the government so as not to receive sanctions such as revocation of home ownership or fines of a certain nominal. Pay attention to the use of building land so that it does not use predetermined limits.
3. Don't Do a Major Overhaul Before the Recommended Deadline
As stated above, it is recommended not to change the design and function of subsidized housing on a large scale before the stipulated time limit of 5 years. Always consider the pros and cons before you decide to undertake a subsidized home renovation.
4. Not Used for Commercial Activities (Rent or Sale)
The government plans to build subsidized housing so that people can live in decent housing. So, it is better to take advantage of the initial purpose of building the subsidized house for the initial owner to live in. You may consider renting out or taking over a home ownership loan after 5 years of ownership.
That is the understanding of the rules that must be obeyed when a debtor wants to renovate a subsidized house. Keep obeying the applicable rules, BFI friends. If you need funds to renovate your house, especially subsidized housing renovations, you can apply for a home renovation loan to BFI Finance! Only with the guarantee of BPKB Cars, Motorcycles, and House Certificates, do you have the opportunity to get various loan ceilings and low-interest rates. Other information and conditions related to loan applications through BFI Finance can be accessed at the link below.
Information on Application for BPKB Motor Guarantee Loans
Information on Application for Car BPKB Guarantee Loans
Information on Application for a Home Certificate Guaranteed Loan
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