Oral Answer by Ministry of National Development on flat buyers’ inability to take possession of new flats after reassessment of their HDB Loan Eligibility
Feb 12, 2015
Mr Zainal Sapari: To ask the Minister for National Development:-
(a) for the years 2013 and 2014, how many potential HDB flat buyers were not able to take possession of their new HDB flat due to a cash shortfall after a reassessment of their HDB Loan Eligibility (HLE);
(b) whether HDB can consider refunding the whole deposit for the purchase of a new flat to buyers who cannot take posession because of the new HLE assessment; and
(c) whether HDB can consider allowing the purchase of the new flat to be completed based on the first HLE offered to the buyers.
Answer:
HDB conducts a second credit assessment before it disburses a housing loan to flat buyers when the keys are ready for collection. This usually occurs a few years after the first credit assessment and an HDB Loan Eligibility (HLE) letter is issued. The second assessment is to check that flat buyers’ financial positions have not deteriorated in the intervening years, and that they are still able to service the monthly mortgage instalments.
In 2013 and 2014, 51 flat buyers were unable to take possession of their new flats after the second credit assessment. If a flat buyer does not proceed with his flat purchase, 5% of the purchase price will be forfeited to HDB. HDB will try to help such families, for example, in selected cases of genuine financial hardship, HDB may consider refunding the forfeited amount.
It would not be prudent to complete the purchase if the buyers are no longer able to service a housing loan. It would merely be creating a potential loan defaulter with many other new problems for the family.