HDB'S REDUCED REPAYMENT SCHEME

HDB'S REDUCED REPAYMENT SCHEME: * * *

**

(Number of cases approved): **

21.

Mr Liang Eng Hwa asked the Minister for National Development (a) how many cases under HDB's Reduced Repayment Scheme were approved in 2006, 2007 and 2008 respectively; and (b) whether HDB has any plans to enhance the scheme so as to reduce the number of cases of flats being repossessed.

Mr Mah Bow Tan: The HDB has in place various financial assistance measures to help flat owners who are in temporary financial hardship. The Reduced Repayment Scheme (RRS) is one such measure, whereby the monthly mortgage instalment is reduced for a limited period not exceeding two years. From 2006 to 2008, HDB has granted the RRS to about 24,000 households.

The financial assistance measures are meant to give the lessees some time to tide over temporary financial difficulties. They are not meant to be long-term solutions. Lessees whose financial situation has deteriorated must be prepared to make lifestyle changes such as sub-letting a room, include another working family member as a joint owner or downgrading to a smaller flat. Enhancing the RRS for such lessees will not help, as they will still be unable to pay the mortgage installments once the assistance comes to an end.

HDB will give ample time, advice and assistance to allow lessees to work out a realistic long-term financial solution. For example, HDB can help by offering another concessionary loan to facilitate downgrading.

Unfortunately, not all lessees in financial hardship are receptive to advice and some are even reluctant to take action to prevent their arrears from accumulating. In such cases, HDB will have no choice but to compulsorily acquire their flats so that the lessees do not end up in greater debt. I must stress that compulsory acquisition is the last resort to help these households, taken only after all other measures have been exhausted.

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