HDB CONCESSIONARY LOANS FOR HDB LESSEES WHO DOWNGRADE

HDB CONCESSIONARY LOANS FOR HDB LESSEES WHO DOWNGRADE: * * *

30.

Mr Cedric Foo Chee Keng asked the Minister for National Development in light of the grant of a second concessionary loan to HDB lessees who are upgrading to larger flats, will his Ministry consider granting concessionary loans to lessees who are downgrading due to financial difficulties.

Mr Mah Bow Tan: In support of the home ownership policy, eligible citizen families are given an HDB concessionary loan to help them finance the purchase of their first HDB flat. In addition, to facilitate social mobility, citizen families who are upgrading to bigger flats are eligible for a second HDB loan.

Second-timer households that are moving laterally or downgrading can generally use the proceeds from the sale of their existing flats to finance the purchase of their next flat. Alternatively, they can take up a mortgage loan from one of the banks.

Nonetheless, since 2003, HDB has been exercising flexibility on a case-by-case basis to help downgraders with a second concessionary loan. In particular, HDB has been sympathetic in considering appeals from those facing severe financial hardship arising from retrenchment, business failure, prolonged illness or death of the sole breadwinner.

To ensure that the new loan does not result in a financial burden that the household is unable to handle, the loans are subject to credit assessment by HDB.

The granting of a second concessionary loan for downgraders is considered on a case-by-case basis (rather than a general policy) to ensure the Government’s limited housing subsidies are disbursed to those who are truly in need.

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