LPPSA Allows Second Home Financing Without Settling the First Financing Starting 4 October 2026
Published: 26 September 2026
Last updated: 26 September 2026
Written by Casey Low & Team
Property Consultant | Affordable Housing Specialist
Over 15 Years of Experience in Residensi Wilayah (RUMAWIP), Rumah Selangorku (LPHS) & Affordable Housing
Good news for civil servants who still have an outstanding first home financing with LPPSA. Starting 4 October 2026, eligible applicants may apply for Second Home Financing without having to fully settle their First Home Financing beforehand.
This change provides greater flexibility for civil servants who wish to purchase a second home, move to a property that better suits their family’s needs, or utilise their remaining financing eligibility. However, this does not mean that every applicant will automatically qualify for a second financing facility. Approval remains subject to the applicant’s remaining eligibility, repayment capacity and the prevailing LPPSA terms and conditions.
Official LPPSA Announcement
This change was officially announced by LPPSA through an Information Notice dated 25 September 2026.
Sumber: Notis Makluman Rasmi LPPSA, 25 September 2026.
[Read Notis Rasmi LPPSA at here]
What Will Change Starting 4 October 2026?
Before this enhancement, LPPSA’s general conditions required the outstanding balance of the First Financing to be fully settled before an applicant could apply for Second Financing.
Under the new 2026 facility, applicants may use their remaining financing eligibility for Second Financing even if their First Financing has not yet been fully settled.
At the same time, the maximum LPPSA financing eligibility limit will be increased to RM1 million, depending on the applicant’s net income and eligibility assessment.
Important: The RM1 million limit is not an automatic entitlement for every civil servant. The actual amount that an applicant may qualify for depends on net income, existing commitments, remaining eligibility and LPPSA’s assessment.
LPPSA Second Financing Requirements for 2026 (LPPSA second home financing 2026)
According to LPPSA’s official FAQ dated 25 September 2026, applicants must meet the following requirements:
The applicant must be an eligible public-sector employee who qualifies for LPPSA housing financing.
Salary deductions for the First Financing must have commenced.
There must be no outstanding arrears on the active First Financing.
The applicant must pass LPPSA’s repayment capacity assessment and meet the prevailing eligibility requirements.
This means that having remaining financing eligibility alone is not sufficient. LPPSA will also assess the repayment record of the First Financing and the applicant’s ability to manage both financial commitments.
New LPPSA Eligibility Limit of Up to RM1 Million
The new maximum financing eligibility limits based on net income are as follows:
Net Income | Maximum Eligibility Limit |
Above RM10,000 | RM1,000,000 |
RM10,000 | RM950,000 |
RM9,500 | RM930,000 |
RM9,000 | RM900,000 |
RM8,500 | RM880,000 |
RM8,000 | RM850,000 |
RM7,500 | RM830,000 |
RM7,000 | RM800,000 |
RM6,500 | RM780,000 |
RM6,000 | RM730,000 |
RM5,500 | RM670,000 |
RM5,000 | RM610,000 |
RM4,500 | RM550,000 |
RM4,000 | RM480,000 |
RM3,500 | RM430,000 |
RM3,000 | RM350,000 |
Sehingga RM2,500 | RM280,000 |
Under LPPSA’s definition, net income refers to basic salary plus eligible fixed allowances, minus compulsory deductions. The table above shows the maximum limits only and does not guarantee the actual amount that will be approved.
How Is the Remaining Eligibility for a Second Home Calculated?
In simple terms, Second Financing uses the applicant’s remaining eligibility after taking into account the financing already approved or utilised for the first home.
Simple example:
Current maximum eligibility: RM850,000
First Financing already utilised: RM300,000
Estimated remaining eligibility: RM550,000
However, the RM550,000 figure is still not a final approval amount. LPPSA will assess the applicant’s repayment capacity and other prevailing requirements.
The approved amount is also generally subject to the lowest amount among the property price, JPPH valuation, amount applied for and the applicant’s maximum financing eligibility. (LPPSA second home financing 2026)
Applicants may check their estimated eligibility through the LPPSA SmartKira calculator starting 4 October 2026.
Second Home Financing Margin: 90% or 100%?
The Second Financing margin depends on the status of the First Financing:
First Financing has not been fully settled: Up to 90%.
First Financing has been fully settled: Up to 100%.
Type 5 Financing (Takeover) and Type 7 Financing (Renovation) for the same property: Up to 100%, subject to the applicable conditions.
If the First Financing is still active, the applicant should be prepared to pay the difference between the property price and the approved financing amount.
This may involve approximately 10% of the property price, or possibly more if the JPPH valuation or the applicant’s eligibility is lower than the selling price. Other property-purchase costs should also be planned separately.
New Interest or Profit Rate
LPPSA will apply a Blended Rate method:
Financing portion of up to RM750,000: 4.00% per annum.
Financing portion above RM750,000 and up to RM1 million: 4.50% per annum.
This calculation takes into account the total property financing approved under both the First Financing and Second Financing.
Based on LPPSA’s official example, if the First Financing is RM250,000 and the applicant applies for Second Financing of RM750,000, the final rate for the Second Financing would be approximately 4.17% per annum.
This is because RM500,000 of the Second Financing falls under the 4.00% rate, while the remaining RM250,000 falls under the 4.50% rate.
Are All Types of Financing Allowed?
LPPSA states that all financing types are allowed for Second Financing, subject to the applicable requirements.
However, there are important conditions relating to land financing:
Applicants who currently have a First Financing under Type 4 or Type 5 for land, but have not yet applied for Type 6 financing to construct a house, are not allowed to apply for another Type 4 or Type 5 financing as their Second Financing.
Type 4 or Type 5 financing for land followed by Type 6 financing to construct a house is considered one financing eligibility, not two.
Must Applicants Use the Same Insurance or Takaful Panel?
Not necessarily. For Second Financing, applicants are not required to select the same insurance or takaful panel used for their active First Financing.
The exception applies to Type 7 Financing (Renovation). For this financing type, the applicant must use the same insurance or takaful panel as the First Financing.
What Happens to Applications Submitted Before 4 October 2026?
Applications submitted before 4 October 2026 will be processed based on the eligibility limit in effect on the date the application was received.
According to LPPSA’s official FAQ, these applications cannot be converted to the new financing amount of up to RM1 million.
If you are currently planning an application, check your actual situation and supporting documents before making any decision. Do not cancel or resubmit an application without first obtaining official confirmation from LPPSA.
My View: A New Opportunity, but Do Not Focus Only on Eligibility
This enhancement creates an opportunity for more civil servants to purchase a second home without waiting for their First Financing to be fully settled. However, the most important consideration is not simply how much you are eligible to borrow.
Applicants should also consider their monthly repayment capacity, savings for the financing shortfall, the cost of owning two properties, maintenance fees and family commitments.
A second home should help meet your family’s housing needs or support your long-term asset planning—not create additional financial pressure.
Before selecting a project, complete these three checks:
Check your remaining LPPSA eligibility.
Estimate the amount you need to prepare if the financing margin is limited to 90%.
Ensure that the combined monthly repayments remain comfortable within your monthly cash flow.
Want to Check Your Second Home Eligibility?
If you are a civil servant and would like to know whether your remaining LPPSA eligibility is suitable for purchasing a second home, we can assist with a preliminary eligibility assessment and project matching based on your budget and preferred location.
The preliminary assessment is free of charge. Final approval remains subject to LPPSA’s official assessment, requirements and terms.
Frequently Asked Questions （FAQ）
1. Can I purchase a second home if my First LPPSA Financing has not been fully settled?
Yes. Starting 4 October 2026, eligible applicants may apply if salary deductions for the First Financing have commenced, there are no outstanding arrears, the applicant still has remaining eligibility and the applicant passes LPPSA’s repayment capacity assessment.
2. Can I obtain 100% financing for my second home?
If the First Financing has not been fully settled, the Second Financing margin is up to 90%.
Financing of up to 100% may apply when the First Financing has been fully settled, as well as in certain circumstances specified by LPPSA.
3. Is everyone eligible for financing of up to RM1 million?
No. RM1 million is the maximum limit for applicants with a net income above RM10,000. Approval remains subject to LPPSA’s requirements, the applicant’s existing commitments and repayment capacity.
4. When can I check my new eligibility through SmartKira?
The SmartKira calculator incorporating the new eligibility limits will be available starting 4 October 2026.
5. Where can I check the official information?
Please refer to LPPSA’s official notice and FAQ dated 25 September 2026:
https://www.lppsa.gov.my/my/upload/pengumuman/2026/09/523442ad-28a1-4ed5-a1e2-ec7ce0e223a8.pdf
Looking for an Affordable Home?
If you are currently planning to purchase an affordable home such as Residensi Wilayah, Rumah Selangorku, PPAM or Residensi MADANI, you may view the projects currently available through our website.
Still unsure which project suits your income, financial commitments or financing eligibility? Contact Casey Low & Team for a preliminary eligibility assessment and suitable project recommendations.
Disclaimer
This information is based on LPPSA’s official notice and FAQ dated 25 September 2026. Requirements and eligibility criteria may change from time to time. Please refer to LPPSA for official confirmation before making any financial decision.
Comments