What is an LPPSA Loan?

The LPPSA loan is a government-backed housing loan scheme that offers a fixed, competitive interest rate (currently 4% p.a. for most schemes) and allows for a high financing margin, often up to 100% or 105% of the property value, making homeownership highly accessible for public sector employees.³

It is available for a wide variety of purposes:

• Type 1: Buying a completed house.⁴Type 3: Buying a house under construction.⁵
• Type 2/4/6: Building a house on your own land (or land previously financed by LPPSA).⁶
• Type 5: Settling an existing housing loan with a commercial bank (Refinancing).⁷
• Type 7: Home renovation.⁸

✅ Eligibility Requirements

To qualify for an LPPSA loan, you must be a permanent employee in the Malaysian public sector and meet these basic criteria:

• Citizenship: Must be a Malaysian citizen.⁹
• Employment Status: Must be a permanent officer (not contract) currently serving in the Public Sector (e.g., Civil Service, Police, Armed Forces, Statutory Bodies, Local Authorities).¹⁰
• Service & Confirmation: Must have served for at least one (1) year and have been confirmed in your position.¹¹
• Disciplinary Status: Must not be bankrupt, suspended from work, or facing disciplinary action that could lead to dismissal.¹²
• Loan Entitlement: You are entitled to two (2) LPPSA loans throughout your service, but the first loan must be fully settled before applying for the second.¹³

Calculating Your Loan Eligibility

LPPSA determines the maximum loan amount based on your income and repayment capacity.¹⁴ The main rules are:

1. Your monthly loan instalment must not exceed 60% of your basic salary and fixed allowances.¹⁵
2. Your total monthly debt (including the new LPPSA instalment) must not exceed 80% of your net income.¹⁶
3. Your net salary (after compulsory deductions like EPF/SOCSO/Income Tax) must be at least 20% of your gross income.¹⁷

Pro Tip: Use the LPPSA Eligibility Calculator on the official LPPSA website to get an immediate, accurate estimate of your maximum financing amount before you begin the application.¹⁸

👣 Step-by-Step Application Process

The application for an LPPSA loan is primarily done online through the official LPPSA financing portal.¹⁹

Step 1: Preparation and Eligibility Check

1. Calculate Eligibility: Use the official online calculator to confirm your maximum loan amount.²⁰
2. Choose Financing Type: Select the appropriate loan type (e.g., Type 1 for a completed property, Type 3 for a new development).
3. Appoint a Lawyer: Engage a panel lawyer registered with LPPSA, as they will handle the legal documentation and submission process.

Step 2: Online Submission via LPPSA Portal

1. Register/Login: Access the LPPSA Online System. New users must register an account.
2. Complete Application Form: Fill in all required details, including:
   • Personal and service information.²¹
   • Property details (purchase price, location, etc.).²²
   • Income and commitments (as per your payslip).
   • Selection of your desired Takaful/Insurance provider (MRTA/MRTT/LTHO).²³
3. Submit & Print: Submit the application online and print the necessary forms and supporting documents checklist generated by the system.

Step 3: Document Gathering and Certification

Gather all required documents and have them certified true copy (CTC) by your Head of Department (Ketua Jabatan).

Step 4: Submission and Approval

1. Submit to LPPSA: Your appointed lawyer will compile the complete set of required documents and submit them to LPPSA on your behalf.
2. Processing: LPPSA will process the application and, if necessary, instruct the Valuation and Property Services Department (JPPH) for a property valuation.
3. Approval Letter: Once approved, LPPSA will issue a Letter of Offer detailing the financing terms.²⁴ You and your lawyer must sign and return this letter promptly.

Step 5: Disbursement and Repayment

1. Legal Documentation: Your lawyer will complete the necessary legal documents (e.g., Loan Agreement, Charge Form).
2. Disbursement: LPPSA will disburse the loan funds to the seller, developer, or financial institution (for refinancing) in stages as per the legal agreement.²⁵
3. Repayment: Your monthly repayment will begin through an automatic salary deduction managed by your department’s accountant.²⁶

📋 Essential Document Checklist

The specific documents required depend on the type of financing (Type 1, Type 3, etc.), but the core set of documents for the applicant is:

Note: For joint loans (with spouse or family members), you will also need certified copies of the co-applicant’s ID and supporting documents like the Marriage Certificate or Birth Certificate to prove the relationship.

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LPPSA Information Sources by Claim Category