FLPP, SSB, AND BP2BT

COMPARISONS
 FLPP AND SSB
FLPP – Liquidity Facility SSB – Interest Rate Subsidy
FLPP and SSB tries to increase
access to housing by
130 M IDR 130 M IDR capping mortgage interest
Consumer: Consumer: rate at 5%
2 M IDR 2 M IDR

SBUM: IDR 4 M SBUM: IDR 4 M On top of the FLPP and SSB

Mortgage: Bank
subsidy, the government gives
31 M IDR additional down payment
assistance (SBUM) of IDR 4 Million
GoI Subsidizes Mortgage: Bank
Mortgage: GoI the difference IDR 124 M
IDR 93 M between Banks lend at market
(Liquidity funding, repaid at market rate and rate (~12%)
0.5% rate) subsidized rate
 FLPP AND SSB VOLUMES
FLPP and SSB Units Achieved FLPP and SSB Budget Absorbed (IDR Billion)
Program 2015 2016 2017 2018
250.000
FLPP 6,055 5,268 2,707 5,895
SSB 67 259 1,472 2,286
200.000
Total 6,122 5,527 4,179 8,181
150.000
SSB can achieve more volume with smaller
100.000 budget during the budget year, but will create
future liabilities.
50.000

-
2015 2016 2017 2018
FLPP SSB
FLPP IS FISCALLY EXPENSIVE FOR THE
GOVERNMENT
130 M IDR
Fiscal Cost Consumer Economic Cost
2M IDR
SBUM Down Payment
4 M IDR 4 M IDR
Assistance
GOI Funds Mortgage: Bank (25%) GOI Funds
31 M IDR
97 M IDR ~54 M IDR
on day 1 over life of loan
Mortgage: GoI (75%)
93 M IDR IDR 93 M
50 M IDR
(Liquidity funding, repaid at Present Cost, net of funds
93 M FLPP
Funding Today
0.5% rate) returned over life of loan
discounted at 8.2%
SSB EXPOSES GOI TO HIGH CONTINGENT LIABILITIES RISK
Every 1T of SSB generates 14T of future liabilities

Consumer Fiscal Cost Economic

2 M IDR
Year 2-20 Cost
Year 1
SBUM Life of Loan
4 M IDR
4M IDR
6M IDR1 53 M IDR
x 19 years
6M IDR1 Present Value of 6MM IDR subsidy over
20 years discounted at 8.2%

Bank
Funding (1) SSB Subsidy: For a property with a price of 130MM IDR, the annual cost
124 M to reduce market rate of 12% to subsidized rate of 5% is 6 M IDR
IDR
Subsidy spread over life of loan exposes GoI to floating rate risk

5
 MORE SUSTAINABLE SUBSIDY PROGRAM: BP2BT DOWN
PAYMENT ASSISTANCE
130 M IDR
Consumer ▪ One time assistance
Consumer DP 5% IDR 7 M payment
DP Assistance GoI: Down Payment Assistance given once
Assistance
Max. 45% Max IDR 54 M
at the beginning of ▪ Progressive assistance
the loan amount (Min IDR 42 M,
Max IDR54 M)
Fiscal Cost = Economic Cost
Mortgage: Bank
Mortgage IDR 69M ▪ Mortgage interest rate
Min. LTV 50%
follows market rate
 FLPP, SSB, AND BP2BT KEY DIFFERENTIATORS
FLPP SSB BP2BT

Liquidity funding Interest rate subsidy Down payment assistance

% Fixed rate at 5% % Fixed rate at 5% % Market rate

Calculates basic individual Calculates basic individual Calculates household income

income income

Tied to property price Tied to property price $$ Tied to income

 COMMERCIAL MORTGAGE LOANS CAN’T COMPETE AGAINST
FLPP AND SSB
Year 5-20
14%
Commercial Program
Year 1-5 13%
BTN 9%

BRI 8% Subsidy Gap Too High

Crowds Out Private Sector

GOI 5% FLPP/SSB

By leaving the mortgage interest rate at the market rate, BP2BT doesn’t crowd out private sector
 FLPP AND SSB CREATE RISK OF MISTARGETING
FLPP/SSB Eligibility Criteria is based on
Maximum Individual Basic Income IDR 4 M1
(1) 4M IDR landed houses/ 7M IDR for multi-story

Individual Basic Income High potential for leakage

1.82 working adults
50-70% per household (SUSENAS) 2 income earners: Gross Income
of Gross Income

Husband Wife
Max Individual Max Gross 6M IDR 3M IDR
Basic Income of Household Income
4 M IDR of ~10 M IDR
Wife with 3M IDR income is the applicant
Actual HH income of ~9m IDR
By calculating household income, BP2BT ensures the assistance serves the right target
FLPP AND SSB SUBSIDY AMOUNT TIED TO
PROPERTY PRICE
Lowest income consumers receive lowest subsidy, while highest income receives highest
subsidy

Subsidies will become twice as expensive for multi-story properties

→ With FLPP scheme, economic cost of Multi-story is 100.5 M IDR

Annual home price increase will also increase FLPP and SSB budget

BP2BT ensures fairness and efficiency across all income amount and property type
▪ BP2BT assistance amount tied to household income and not linked to property price.
▪ The lower the income amount, the higher the assistance amount
▪ With BP2BT scheme, economic cost for multi-story is the same with landed house.
WITH IDR 1 TRILLION BUDGET, WHICH OPTION CAN
FUND MOST VOLUME?
Funding units: Year 1 Funding units: Lifetime
120.000 21.500
21,000*
100,000 21.000
100.000
20.500

80.000 20.000

19.500
60.000
19.000 18,800
18,500
40.000 18.500

21,000*
18.000
20.000
10,300 17.500

0 17.000
FLPP SSB BP2BT FLPP SSB BP2BT

* Assuming the average assistance amount for BP2BT is IDR 48 M

Economically, BP2BT can give more
volume compared to FLPP and SSB
Terima Kasih!