Oral Answer by Ministry of National Development on allowing parents to rely on children’s income to grant a concessionary loan for purchase of a second flat

Apr 1, 2019

Mr Murali Pillai: To ask the Minister for National Development in circumstances where low-income parents who co-own their HDB flats with their children decide to sell their flats to enable their children to be removed as co-owners so that the children can buy flats in their own names, whether HDB can allow these parents to rely on their children’s income in deciding whether or not to grant a concessionary loan for a purchase of a second flat in the parents’ names. 

Answer:

As part of credit assessment for housing loans, HDB and financial institutions will only consider flat buyers’ incomes because they are the ones who are borrowing and will be servicing the mortgage. 

For parents who co-own their HDB flats with their children, and wish to purchase another flat when the children move out, they can consider right-sizing to a smaller unit that is within their budget. This may be more sustainable in the long-term, as compared to having their children service both the mortgage on their parents’ flat, as well as their own home.  

Nevertheless, in the circumstance where the sales proceeds are not sufficient even for a right-sized unit, then HDB would be prepared to exercise flexibility and extend a housing loan to the parents on a case-by-case basis. 

As each family may have unique circumstances, I would suggest that they approach HDB to explore the possible options so that they can sustain their housing arrangement.