NEW HDB FLATS (Review of maximum amount of housing loan)

Dr S. Vasoo asked the Minister for National Development whether the Housing and Development Board will review the maximum amount of housing loan available to buyers of new HDB flats.

Mr Dhanabalan: Mr Speaker, Sir, a buyer of a new flat is eligible for a loan from HDB of up to 80% of the sale price of the flat. The buyer is required to pay a 20% downpayment at the time he or she signs the Sales Agreement for the flat. If the buyer subsequently decides not to proceed with the purchase, the downpayment is forfeited. The 20% downpayment is necessary to ensure that the buyer is serious in his commitment to purchase the flat. It is not an onerous requirement as the buyer can use his CPF savings to make the downpayment.

However, HDB does provide loans of more than 80% of the sale price for three categories of persons who may have difficulties in making the downpayment. First, low income families purchasing 3-room and 4-room (Simplified) flats are eligible for a maximum loan of up to 95% of the sale price of the flat. Second, those affected by HDB's Relocation Programme are provided loans of up to 100% of the sale price, if they purchase 3-room and 4-room (Simplified) flats; and they can get up to 90%, if they purchase larger flats. Third, those affected by Government's Resettlement Programme are given loans of up to 90% of the sale price to purchase HDB flats.

The present policy on loans is a reasonable one, and I do not see any need to increase or change it.