HDB'S DESIGN, BUILD AND SELL SCHEME FLATS AT BOON KENG

HDB'S DESIGN, BUILD AND SELL SCHEME FLATS AT BOON KENG: * * *

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(Applicants who lost their booking and deposits): **

20.

Mr Inderjit Singh asked the Minister for National Development (a) how many people who registered for HDB's Design, Build & Sell Scheme (DBSS) flats at Boon Keng lost their booking for the flats and their deposits (in terms of option fees) because they failed to secure their loans from HDB or the banks; (b) whether HDB processed the loan applications before or after the applicants paid their 5% option fee; and (c) how many flats remain unsold as a result of cancellations due to whatever reasons.

Mr Mah Bow Tan: Applicants for DBSS flats are required to pay a booking fee amounting to 5% of the flat price upon booking. This is similar to practices in the private property market, as DBSS flats are built by a private developer. This booking fee is fully refundable if applicants are subsequently found to be ineligible to buy a DBSS flat. If they cancel their application although they are eligible, they would have to forfeit one-quarter of the booking fee.

According to the developer of the DBSS project at Boon Keng Road, there were 21 cases of cancellations as at 15th May 2008. 13 cases were on grounds of ineligibility, such as exceeding income ceiling, ownership of private property or not meeting the minimum occupation period for the current flat. These applicants will be refunded their booking fees in full.

Out of the remaining eight cancellations, five cancellations could be related to financing reasons while three were due to health-related reasons. Of the five financing-related cases, only one had applied for and was granted an HDB loan after booking the flat. The other four cases did not apply for an HDB loan, although one of them did enquire at the HDB loan counter.

Buying a flat is a major financial commitment, and applicants are advised to work out their finances before committing to a flat purchase, including checking on their bank or HDB loan eligibility before booking a flat.

Since 1st January 2007, HDB requires those who need mortgage financing to first obtain an HDB Loan Eligibility (HLE) Letter from HDB or a Letter of Loan Offer (LO) from the banks before they commit to a flat purchase. For the Boon Keng project, flat buyers had more than one month from the launch of the project to work out their finances before the start of the booking exercise.

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