Buyers Beware! Why Your Mortgage Could Be a Risky Conduit Deal with No Guarantee

In Malaysia, home financing for under-construction properties operates more like project financing than a standard mortgage. Buyers’ loans are disbursed progressively to developers based on construction milestones, to fund developers’ projects without equivalent risk protections. Unlike in other construction projects, home buyers have little control, limited access to critical housing project information, and no recourse if construction stalls or fails. They still bear repayment obligations, even for incomplete houses. This arrangement shifts construction and financial risks from developers to buyers, prompting calls for a mandatory build-to-sell practice in the housing industry.