MARANG: The Government has allayed fears that the use of RM1.5bil from the Employees Provident Fund (EPF) to finance the special funding scheme to enable eligible people buy housing units in Kuala Lumpur is detrimental to EPF contributors.

Prime Minister Datuk Seri Najib Tun Razak said the amount of financing for the scheme was not big compared to the funds with EPF.

"The scheme does not undermine the interests of EPF because the value of the housing units in the market is far higher than the purchase price.

"If a buyer is unable to or does not repay the loan, the unit can be sold for a higher price. We always safeguard the interests of EPF," he told reporters here Friday.

The Prime Minister and his wife, Datin Seri Rosmah Mansor, are on a day-long visit to Terengganu.

Fomca has urged the Government not to use EPF savings to fund loans for the purchase of public housing projects as it would not make money for the fund and the risk of payment default would be high.

Federal Territories and Urban Well-being Minister Datuk Raja Nong Chick Raja Zainal Abidin had said that EPF would channel RM1.5bil to the Federal Territories Foundation as part of a special funding scheme.

The Prime Minister had previously announced the scheme would start on March 1 to help those keen on owning homes under the National Economic Action Council's people housing programme as well Kuala Lumpur City Hall's public housing schemes.

Najib said Raja Nong Chik would be asked to further explain the scheme to the public, adding that it was designed to help the lower income group who failed to obtain loans from financial institutions to own houses.

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