MP says Hiyaavehi housing loans lack concessions, urges review
The Hiyaavehi scheme offers loans at a 5% interest rate to individuals who own land for housing construction but lack the financial capacity to build.
Galolhu North MP Mohamed Ibrahim has written to President Mohamed Muizzu stating that the Hiyaavehi financing scheme does not offer special concessions for housing loans and is not accessible to many residents due to existing eligibility rules.
The Hiyaavehi scheme offers loans at a 5% interest rate to individuals who own land for housing construction but lack the financial capacity to build. The MP said the three categories of loans under the scheme do not contain concessions tailored for those with financial constraints, as the loans are issued under standard lending conditions.
In his letter, Mohamed Ibrahim highlighted several issues:
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Borrowers are not eligible if loan repayment exceeds 40% of their income
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A loan of MVR 6 million at 5% interest over 25 years would require a monthly repayment of MVR 35,000, making it unaffordable for many
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Since 80% of the building must be used for residential purposes, borrowers cannot depend on rental income to service the loan
The MP said that, as a result of these conditions, many Malé residents do not qualify for the loans. He urged the President to introduce concessions that would allow more people to benefit from the scheme.
Loan eligibility is determined through financial screening to ensure applicants have the capacity to repay.
Hiyaavehi Loan Scheme
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Collateral: Land registry to be mortgaged with the bank
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Interest rate: 5%
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Repayment period: Up to 25 years (based on applicant’s age and bank assessment)
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Grace period: Up to 18 months
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Loan use: New construction or completion of partially built houses
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Advance: Maximum 15%, with further disbursements tied to progress
Categories
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Rahvehi: Up to MVR 1 million for housing in islands outside Malé (no equity needed)
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Saharu: Up to MVR 3 million with 5–10% equity, applicable to designated urban centres
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Fahimale: Up to MVR 6 million with 5–10% equity, for housing in the Greater Malé Region
