ASSISTANCE TO LOW INCOME FAMILIES TO OWN HDB FLATS

Dr S. Vasoo asked the Minister for National Development whether plans will be implemented to help low income families with low Central Provident Fund savings to become Housing and Development Board home owners.

The Minister of State for National Development (Mr Lim Hng Kiang) (for the Minister for National Development): Mr Speaker, Sir, the Housing and Development Board currently has a number of financial assistance schemes to help low income families with little CPF savings own HDB flats. At present, all HDB rental flat tenants as well as households with monthly incomes of $1,000 or less are required to pay a downpayment of only 5%, as compared to the 20% required of other flat buyers, when they purchase 4-room Simplified or smaller flats from HDB. HDB will grant housing loans for the remaining 95% of the sale price.

Similarly, HDB will also provide housing loans of up to 95% of the posted price if they purchase 4-room Simplified or smaller resale flats from the secondary market. By comparison, all other HDB flat buyers are eligible for a mortgage loan of only up to 80% of the posted price. In addition, low income families may also repay their mortgage loans under a Ballooning Repayment Scheme, which allows them to pay lower monthly instalments in the initial years, with higher payments in later years when their incomes increase.

My Ministry is aware that there are some low income households in rental housing who, despite these financial assistance schemes, still face difficulty buying a flat of their own. The Ministry of National Development and HDB are currently exploring ways to help these households own their own flats.

Dr S. Vasoo (Tanjong Pagar GRC): Sir, would the HDB be reviewing its loan scheme for helping low income families to uplift themselves in the light that there is a wide discrepancy between the posted price and the actual market price and that many of them cannot furnish the 20% cash outlay?

Mr Lim Hng Kiang: Sir, as I explained in my answer just now, households with low income can ask for a mortgage loan of 95% of the posted price, and not just 80%. Nevertheless, my Ministry is aware that some of these households still face difficulty in purchasing flats from the secondary market. The Ministry is also currently reviewing the mortgage loan financing for the resale market, in particular, to bring the posted price closer to the market price.