The government has entered an agreement with Bank South Pacific to provide a housing loan facility for up to K200 million.
Speaking on FM 100’s talkback show this morning, the prime minister made the announcement.
The government will provide an initial capital investment of K2 million with BSP through the 2015 National Budget.
With a repayment term of up to 40 years, this News loan arrangement comes with a fixed interest rate of 4 per cent.
On the show this morning, Mr. O’Neill told listeners that a proposal put forward by BSP was approved by the National Executive Council.
He said this is to help Papua New Guineans to build new Newss, which then stimulates the construction industry.
Under this program, Bank South Pacific will reduce and fix the cost of borrowing for first News buyers at a fixed rate of 4 per cent within a period of 40 years.
This loan facility will only be made available to first time News buyers with no early repayment penalty, and no other bank fees.
In order to make this widely available for all public servants, the government will review its pay policy.
Mr. O’Neill said this program will include reviewing the Lands Act to preserve secured undeveloped land for the program.
Meanwhile, the Prime Minister dismissed a recent arrangement between the Housing Minister and a chinese financer for a K1.5 billion housing scheme for public servants.
Last week the Housing Minister, together with the National Housing Corporation, announced the successful negotiations with financier, the Industrial and Commercial Bank of China.
However, with this new announcement, the project may not come to reality.
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