51 flat buyers were unable to take possession of their new flats in 2013 and 2014 after the second credit assessment of their HDB Loan Eligibility (HLE), the Ministry of National Development (MND) revealed in Parliament yesterday.
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 HLE letter is issued upon the first credit assessment. The second assessment is to confirm that flat buyers’ are still able to service the monthly mortgage instalments.
“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,” MND said.
If a flat buyer does not proceed with his flat purchase, five percent of the purchase price will be forfeited to HDB.
However, MND said HDB may consider refunding the forfeited amount in some cases of genuine financial hardship.
From the February 2015 Build-To-Order (BTO) exercise, flat applicants who wants a housing loan from HDB will need to produce the HLE letter when they book a flat. Previously, they only needed the HLE letter when they sign the Agreement for Lease, which is four months after booking a flat.
Muneerah Bee, Senior Journalist at PropertyGuru, wrote this story. To contact her about this or other stories email muneerah@propertyguru.com.sg
