Regulation of the Minister of Housing and Settlement Areas Number 2 of 2026 Expands Housing Financing and Converts Down Payment Assistance Subsidies into Processing Fee Subsidies

Introduction

On April 9, 2026, the Ministry of Housing and Settlement Areas issued the Regulation of the Minister of Housing and Settlement Areas Number 2 of 2026 on the Amendment to the Regulation of the Minister of Housing and Settlement Areas Number 9 of 2025 on Facilitation and Housing Financing Assistance for Low-Income Communities ("Regulation 2/2026"). Regulation 2/2026 expands the facilitation and housing financing assistance programs for Low-Income Communities (Masyarakat Berpenghasilan Rendah, “MBR”), including for the ownership of public apartments. Additionally, Regulation 2/2026 adjusts the previous provisions to ensure that the disbursement of housing financing is carried out in accordance with the prevailing laws.

Comparison

Regulation 2/2026 amends the financing and subsidy provisions for MBR previously governed under the Regulation of the Minister of Housing and Settlement Areas Number 9 of 2025 on Facilitation and Housing Financing Assistance for Low-Income Communities ("Regulation 9/2025"). The following outlines the comparison of key provisions between Regulation 2/2026 and Regulation 9/2025:

Key Provisions

Insertion of the Definition of Processing Fee Subsidy

Regulation 2/2026 adds Article 1 point 14a, which defines the Processing Fee Subsidy as government assistance to cover housing mortgage processing fees. This assistance covers provision, administrative, insurance, notary, and credit agreement fees, along with other processing fees subject to the state's financial capacity.

Amendments to Credit and Housing Financing Schemes

Regulation 2/2026 amends Article 4 paragraph (1) letter c so that the ownership of unfinished Public Apartment Units (Satuan Rumah Susun Umum, “Sarusun Umum”) can be financed provided there is a construction guarantee from a guarantor institution. Furthermore, Article 4 paragraph (1) governs the credit/housing financing schemes as follows:

1. Credit/financing for the ownership of finished Public Landed Houses (Rumah Umum Tapak) and Sarusun Umum;

2. Credit/financing for the construction and improvement of Self-Help Houses (Rumah Swadaya);

3. Credit/financing for the ownership of unfinished Sarusun Umum with a guarantee from a guarantor institution;

4. Credit/financing for the ownership of Sarusun Umum with fiduciary security based on a building ownership certificate;

5. Credit/financing for the ownership of Public Landed Houses and Sarusun Umum through lease-purchase; and/or

6. Credit/financing for the construction of livable houses.

Reallocation of Down Payment Assistance Subsidies

Article 9 is amended to expand the subsidy scope by incorporating the financing schemes for the ownership of unfinished Sarusun Umum (with a guarantor institution guarantee) and Sarusun Umum with fiduciary security. For the ownership of Public Landed Houses and Sarusun Umum under these schemes, the government provides subsidies in the form of SBUM, alongside long-term low-cost funding support through the Housing Financing Liquidity Facility.

Amendment to the Form of Subsidies for Public Apartments

Article 9A is added to stipulate that the SBUM for Sarusun Umum is converted into a Processing Fee Subsidy.

Additional Provisions on the Utilization of Processing Fee Subsidies

Article 23 adds paragraph (6), which provides that the utilization of the Processing Fee Subsidy as referred to in Article 9A must be carried out in accordance with the prevailing laws and regulations.

Mutatis Mutandis Application of Disbursement and Governance Provisions

Article 31A and Article 31B are added to govern the implementation of the Processing Fee Subsidy provision. Article 31A establishes that the following provisions apply mutatis mutandis to the implementation of the Processing Fee Subsidy provision:

1. Provisions regarding Implementing Banks (Bank Pelaksana);

2. Disbursement provisions;

3. Disbursement control provisions;

4. Reporting provisions; and

5. Funding provisions.

Furthermore, Article 31B governs that the technical implementation provisions for the Processing Fee Subsidy provision are determined by the Director General or a ministry official appointed by the Minister of Housing and Settlement Areas.

Closing

Regulation 2/2026 expands the housing financing schemes for Low-Income Communities by broadening the financing scope, including for unfinished Public Apartment Units provided there is a construction guarantee from a guarantor institution. Additionally, Regulation 2/2026 converts the Down Payment Assistance Subsidy into a Processing Fee Subsidy for public apartment financing, thereby focusing the assistance on mortgage processing fees such as provision, administrative, insurance, notary, and other related fees. Regulation 2/2026 further establishes that the provisions regarding Implementing Banks, disbursement, disbursement control, reporting, and funding apply mutatis mutandis to the implementation of the Processing Fee Subsidy provision. Regulation 2/2026 also governs that the technical implementation provisions will be determined by the Director General or a ministry official appointed by the Minister of Housing and Settlement Areas. As it became effective on April 9, 2026, without a transitional period, developers and Implementing Banks must immediately align their housing financing practices to ensure compliance with the prevailing laws.