HDB FLAT DWELLERS (Downgrading and restructuring of mortgage loans)

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HDB FLAT DWELLERS:

(Downgrading and restructuring of mortgage loans): 9.

Mdm Ho Geok Choo asked the Minister for National Development if he will provide a status report for the last three years on the number of flat dwellers who have (i) downgraded or sold their flats for rental flats and (ii) asked for their mortgage loans to be restructured.

The Minister of State for National Development (Mr Heng Chee How) (for the Minister for National Development): Mr Speaker, Sir, the number of HDB lessees who sold their flats and moved to a smaller new or resale flat was 6,000 in 2002, 4,700 in 2003 and 4,200 in 2004. The number of HDB lessees who sold their flats and were allocated a subsidised rental flat from the HDB was 1,300 in 2002, 1,400 in 2003 and 1,900 in 2004.

To help HDB mortgagors who are in financial difficulty, HDB allows them to restructure their loans by several methods:

(1) extending the loan repayment period;

(2) reducing or deferring the payment of loan instalments;

(3) including working family members as co-owners of the flat to help pay the mortgage loan instalments; and

(4) paying the mortgage loan arrears by instalment.

In 2002, HDB approved 23,000 applications for financial assistance from HDB mortgagors. These include both new and renewal cases. The corresponding numbers were 35,700 in 2003 and 40,200 in 2004.

Mr Tan Soo Khoon (East Coast): Mr Speaker, Sir, can I ask whether these people who sold their flats in the last few

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years and who were allocated rental flats, were they allocated the flats immediately after they sold their flats or did they have to wait out the 30-month debarment period?

Mr Heng Chee How: Mr Speaker, Sir, HDB rental flats in Singapore are targeted at helping the families who have financial difficulty in buying a flat of their own, and they are built and rented out on a highly subsidised basis. So, because of this, we try to manage competition for this limited stock of highly subsidised flats. Accordingly, the policy has been to have a waiting period of 30 months for people who have sold their HDB flats and then want to apply to rent a HDB flat from the HDB.

In cases where there are special circumstances - as all MPs know, we have constituents who approach us and we make appeals for them - each case is looked at on its own merits and, where the situation warrants it, exceptions have been made.

Mdm Ho Geok Choo (West Coast): How can a divorced mother, who was a housewife and a co-lessee in the matrimonial home before the divorce, go about applying for a subsidised flat and a concessionary loan in the event of a divorce so that she can continue to maintain a family nucleus because she has the custody of the children? In this instance, how can she go about getting the new flat immediately without having to wait for 30 months?

Mr Heng Chee How: Mr Speaker, Sir, first I would like to reiterate that every case of appeal will be studied and looked at on its own merits. For example, not every woman who is divorced is necessarily in financial difficulty and, therefore, the urgency that applies to each case would also differ. So, I would go back to saying that the HDB and the

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Ministry of National Development look at every case on its merits, and we have made exceptions to the waiting period as well as to the application for the second concessionary loan, depending on the financial situation and other surrounding circumstances of each case.

Mr Speaker: May I remind Members that we have a lot of questions to go through. So, I will allow one more last question. Dr Wang.

Dr Wang Kai Yuen (Bukit Timah): Sir, I would like to ask the MOS, of the people who have been given rental flats over the last three years, how many of them are the "exception" cases that he has mentioned?

Mr Heng Chee How: I do not have the precise figures with me here, but I can assure Dr Wang as well as other Members of this House that, every day, I see many of these appeal cases with the facts and the recommendations, and I can testify to the fact that the HDB looks at every such case and they are willing to put up these cases for deviation, ie, approval, to waive those waiting periods, and allocate the rental flats without requiring the person to wait out the 30-month normal waiting period. And I do approve many of them, practically on a daily basis. But if you would like the precise number, I could find that out for you.

Dr Wang Kai Yuen: Just a rough figure. 10%?

Mr Heng Chee How: I would rather say something that is more precise. I will get the number.

Mr Speaker: Very last question. Mr Tan.

Mr Tan Soo Khoon: Would the Minister of State not consider relooking at the 30-month debarment period to make it easier for people who wish to rent a flat

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after selling, because most of these people simply cannot keep up with their mortgage payments? If you debar them for 30 months, you are just depriving them of a home, and many of them come to us and say, "Look, where do I stay after I sell my flat? Where do I stay for the next two and a half years?" So, I think it is time for the Ministry to relook the rule.

Mr Heng Chee How: Mr Speaker, Sir, I think we have got to distinguish between trying to address the needs of a particular group who, for example, after divorce and selling their matrimonial flat and are in financial difficulties and find that the alternative ways of staying with family or renting a room outside, perhaps find it is not possible for them, these are very specific circumstances. But we should not then generalise and say that every household which sells its flat and wants to rent from the HDB is necessarily of these circumstances. So, what I would like to assure Members is that, when we receive the appeals, we look at these cases on their merits, and we have made exceptions from this policy. But I would not want to go and change the entire policy and say that if anybody were to sell his flat and come to the HDB and say, "Now I want to rent one from you", that we would then say, "OK, please join the queue" and intensify the competition with the other group who are generally of lower income who really need this kind of subsidised rental flats and we want to help them this way. So, I think it is a question of how we manage between these two sources of demand, by flexibly taking into account the circumstances of each case.