Government to Subsidize Mortgage Interest for Three Million Homes by Up to 10%

Minister of Finance Purbaya Yudhi Sadewa Issues Regulation on Interest/Margin Subsidies for Three Million Homes Program

Minister of Finance Purbaya Yudhi Sadewa has issued a regulation on the provision of interest or margin subsidies for the Three Million Homes Program. The provisions are stipulated in Minister of Finance Regulation (PMK) Number 65 of 2025.

The interest or margin subsidy mechanism is a form of government assistance in which the state covers part of the interest or margin incurred in the granting of credit.

This assistance aims to expand access to credit or financing for businesses in the housing sector. The recipients of this assistance include micro, small, and medium enterprises (MSMEs), both individuals and legal entities operating in the housing sector.

Interest/Margin Subsidy Amount and Tenor

Under the regulation, which came into effect on September 24, 2025, the government provides interest or margin subsidies of up to 10% with a maximum term of 5 years, depending on the type of recipient and loan amount.

Details are as follows:

No	Subsidy Recipient	Subsidy	Tenor
1	Supply Side (for working capital financing)	5%	4 years
2	Supply Side (for investment financing)	5%	5 years
2	Demand Side (loan ceiling>IDR10 million-IDR100 million)	10%	5 years
3	Demand Side (loan ceiling >IDR100 million-IDR500 million)	5,5%	5 years

It is important to note that if a loan is extended beyond the original subsidy period, no subsidy will be granted for the extended term. As a result, any interest or margin arising from the extension must be fully borne by the borrower.

Subsidy Disbursement Mechanism

The interest/margin subsidy will be disbursed by the Budget User Authority (Kuasa Pengguna Anggaran or KPA) to credit distributors, which are financial institutions or cooperatives appointed as People’s Business Credit (KUR) distributors.

In this case, the designated KPA is the Director General of Housing at the Ministry of Public Works and Housing (PUPR), appointed by the Minister of Finance.

To receive the subsidy payment from the government, credit distributors must submit a payment claim to the Housing Program KPA. This submission must be made no later than the 10th of each month for the outstanding loan balance from the previous month, and must include the following supporting documents:

• A letter of request for interest/margin subsidy payment
• A detailed breakdown of the interest/margin subsidy claim
• A receipt or proof of payment acceptance signed by the credit distributor’s management
• Digital claim data files are uploaded into the SIKIP system (housing subsidy information system)

Tax ID Required for Credit Distributors

Credit distributors who submit applications for interest/margin subsidy payments are required to have a Tax ID. This is because the format of the payment request letter must include the Tax ID.

In addition to the Tax ID, the letter must also include information such as the loan period, amount of the claim, name of the account holder, account number, and bank name. (ASP/KEN)