Written answer by Ministry of National Development on whether HDB will purchase mortgages from private financial institutions in the secondary market or establish a home mortgage company

Nov 7, 2022

Assoc Prof Jamus Jerome Lim: To ask the Minister for National Development since HDB already actively participates in the mortgage lending market, whether it has also considered purchasing mortgages from private financial institutions in the secondary market, or establishing a home mortgage company, similarly to Freddie Mac and Fannie Mae in the United States, to promote longer-term fixed rate mortgage loans.

Answer:

HDB offers HDB concessionary loans to eligible flat buyers to support them in their homeownership aspirations. HDB flat buyers may also seek alternative financing options at competitive interest rates from financial Institutions (FIs). It is not the intent of HDB to compete with FIs in the mortgage financing market.

2        In the United States, Fannie Mae and Freddie Mac were established to purchase mortgages from FIs, providing FIs with the capacity to grant more mortgages.

3        The context in Singapore is different. Our FIs have sound capital positions and stable funding, and their mortgage lending is not constrained by a lack of available funding. Thus, there is no need for the Government to set up entities similar to Fannie Mae and Freddie Mac to finance FIs and support mortgage lending.

4        HDB will continue to focus on its core mission of providing affordable and accessible public housing for Singaporeans.