HDB Loans for Second- and Third-time Flat Buyers

Mr Saktiandi Supaat asked the Minister for National Development (a) whether HDB will allow second- or third-time buyers of HDB flats to take HDB loans if they cannot qualify to borrow from the banks; and (b) whether the Ministry will consider reviewing this policy to help this group.

Mdm Speaker, HDB offers all buyers of HDB flats up to two concessionary loans and this is generally sufficient to meet the life-cycle needs of buyers. The limit of two concessionary loans also helps to ensure the stability of the resale market by preventing excessive churning of HDB flats.

Nevertheless, HDB does exercise flexibility to assist households with a third HDB housing loan on a case-by-case basis. Typically, these are households that require urgent assistance but are unable to secure mortgage financing from banks. The households that receive these third loans are required to have sufficient savings and steady incomes to service the loan because this credit assessment is needed to ensure that households do not end up taking on more debt than they are able to afford.

Mdm Speaker, I would like to thank the Minister for answering this question. I just have a follow-up question.

In terms of the third concessionary loan, does the Ministry have a proportion of the number that have been rejected for the third concessionary loan applications? The reason I am asking is because a lot of families who had sold the first or second home, for example, probably wanted to restart or have a fresh start due to divorce proceedings or are in single-income families. This is a vicious circle. So, on the third concessionary loan application, to what extent are the rejections, if the Minister can share with us on that?

Madam, HDB is generally very flexible in looking at these cases. Last year, it provided a third loan to about 900 households. About 75% of these loans are on a non-concessionary basis – that means, market rate – and 25% are concessionary loans.

As I have said, HDB would want to help and assist applicants to buy a home but HDB is also wary of people who over-stretch, families who over-stretch themselves and end up with more debt. I do not think we want that to happen either just for the pursuit of buying a home, over-stretching their finances and ending up with more debt than is prudent. So, that remains the basis for which HDB will do its assessments but, generally, HDB will also be flexible in wanting to assist applicants to buy their own homes.