Appeals to Switch from Commercial Bank to HDB Housing Loans
Ministry of National DevelopmentSpeakers
Summary
This question concerns Mr Gan Thiam Poh’s inquiry on the frequency and rejection reasons for HDB homeowners' appeals to switch from commercial bank loans to HDB housing loans. Minister Desmond Lee stated that HDB received about 90 appeals annually from 2019 to 2021, all of which were rejected because HDB does not permit refinancing from financial institutions. Minister Desmond Lee explained that HDB targets concessionary loans at lower-income groups and avoids competing with private lenders to ensure a stable mortgage market with diverse financing options. For owners in financial distress, a standardized workflow involving HDB, MND, MOM, and MAS offers assistance through loan restructuring, social service referrals, and accommodation support. HDB remains committed to its mission of providing affordable public housing while encouraging homeowners facing repayment difficulties to approach their lenders early for solutions.
Transcript
54 Mr Gan Thiam Poh asked the Minister for National Development (a) how many appeals has HDB received for each of the past three years to allow existing HDB homeowners to switch from commercial bank housing loans to HDB housing loans; and (b) what are the reasons for unsuccessful appeals.
Mr Desmond Lee: From 2019 to 2021, HDB received about 90 appeals per year from HDB homeowners to refinance their housing loans from financial institutions (FIs) to HDB. The appeals were not acceded to, as HDB does not allow the refinancing of housing loans from FIs to HDB.
HDB offers the HDB concessionary loans to eligible flat buyers, particularly lower-income groups, to support them in their home ownership aspirations. Flat buyers who have better financial means can approach FIs for a housing loan. Given HDB’s focus on supporting Singaporeans’ home ownership aspirations, HDB does not seek to compete with FIs in the mortgage financing market, as doing so may dilute the market share of FIs and reduce their willingness to provide mortgage financing for future flat purchases. This may lead to a reduction in financing options available to HDB flat buyers.
We fully understand that some HDB flat owners may be anxious about the current economic outlook and their ability to service their existing housing loan. For HDB home owners who have housing loans from FIs and are facing difficulties servicing the loans, we encourage them to approach their lenders early to explore solutions. MND, HDB, MOM and MAS have worked with FIs to establish a standardised workflow to assist such HDB flat owners in distress. This includes working with flat owners on potential loan restructuring solutions, referring them to HDB and social service agencies for assistance, and, where foreclosures are unavoidable, working with flat owners to source for their next accommodation.
HDB will continue to focus on its core mission of providing affordable and accessible public housing for Singaporeans.