Ambitious Plan Proposed to Tackle Housing Backlog
In a significant move to address the nation’s substantial housing deficit, Indonesian Housing and Settlement Areas Minister Maruarar Sirait has formally proposed an ambitious subsidized housing quota of 500,000 units for the year 2026. This strategic proposal, which was submitted during a recent cabinet meeting for final approval, is a core component of the government’s long-term plan to provide affordable housing solutions for its citizens. The country currently faces a pressing housing backlog of 9.9 million units, a challenge that this initiative is designed to directly alleviate. The proposed quota is intended to build on the foundation of the existing government credit scheme, a program that has a larger, multi-year objective of constructing and renovating a total of three million homes, demonstrating a clear and persistent commitment from the government to solve this nationwide issue. This action highlights a proactive approach to not only mitigate the current backlog but also to provide sustainable housing for future generations.
Making Homeownership Accessible Through Favorable Financing
A key element of this expansive housing program is the government’s Housing Financing Liquidity Facility (FLPP), which has been designed to make homeownership significantly more accessible for a wider range of the population. The FLPP scheme offers loans at a highly favorable and exceptionally low 5 percent interest rate, a stark contrast to the standard commercial rates that can be as high as 12 percent, effectively cutting the cost of borrowing by more than half. Furthermore, the program requires a minimal down payment of just 1 percent, drastically reducing the initial financial barrier to entry. Combined with extended and long repayment terms, these features make it possible for countless families to afford a home. For the current year, the subsidized housing quota has already been set at 350,000 units, representing a notable increase in the government’s commitment compared to previous years and setting the stage for the proposed 2026 expansion.
A Targeted Rollout to Serve Key Professional Groups
The government has a meticulously planned, large-scale rollout of the program, which is scheduled to commence in September 2025. The initial phase of this rollout has a specific and ambitious target of allocating at least 25,000 subsidized housing units to eligible buyers. To ensure the program’s benefits are distributed equitably and strategically, the government has designated specific housing quotas for various professional groups that play a vital role in society. These groups include hardworking farmers, dedicated teachers, essential laborers, and influential media workers, ensuring that the program reaches those who need it most. Under the FLPP scheme, the government partners directly with various banks to channel low-cost funds, creating a streamlined and efficient process that allows qualified buyers to secure these affordable loans with ease and security. This focused approach ensures that the program is not just a broad initiative but a targeted effort to improve the lives of key community members.
