Debated in Parliament on 19 Nov 2018.
Er Dr Lee Bee Wah asked the Minister for National Development (a) what is the current take-up rate for the Home Protection Scheme (HPS); (b) whether it can be made compulsory for all HDB home owners with outstanding housing loans to take up HPS regardless of whether they are using their CPF to service the loans; and (c) what is the Ministry doing to create more awareness about the importance of HPS and similar schemes.
About 80% of Housing and Development Board (HDB) flat buyers in 2017 used Central Provident Fund (CPF) monies to service their loans. These buyers are covered under CPF Board’s policy which mandates compulsory take-up of the Home Protection Scheme (HPS) for those who use CPF monies to repay any instalment of a housing loan taken to buy an HDB flat. An additional 12% of recent flat buyers used cash to service their loans and took up HPS voluntarily. Effectively, this means that around 92% of recent HDB flat buyers with outstanding loans are covered under the HPS policy or have voluntarily taken up HPS.
Besides HPS, some home buyers may have purchased mortgage-reducing insurance (MRI) products from the private sector. We do not have detailed records of such purchases, but many commercial banks offer such MRI products as part of their loan financing package to home buyers. So, the overall insurance coverage may well be higher.
HDB will continue to work with CPF Board to further encourage voluntary take-up of HPS. For example, besides conducting regular informational talks and distributing HPS booklets to home buyers, HDB will also explain to all flat buyers the benefits and coverage of HPS at the point of flat purchase. We will continue to monitor the situation and assess whether to implement further measures if the need arises.
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