Only 2 per cent of HDB loan applications rejected

PHOTO: Only 2 per cent of HDB loan applications rejected

SINGAPORE - Only 2 per cent of HDB loan applications were rejected from January 2010 to September this year, said National Development Minister Khaw Boon Wan in Parliament last Wednesday.

That works out to 3,500 applications out of a total of 178,000.

The applicants were turned down as they had previously taken two or more loans from HDB, he said in a reply to Mr Lim Biow Chuan (Mountbatten SMC).

Mr Lim and Mr Liang Eng Hwa (Holland-Bukit Timah GRC) had asked Mr Khaw if HDB could be more lenient in letting some people take a third loan, especially if they needed to buy new homes because of reasons like divorce.

Without an HDB loan, they are "stuck with a rental flat", said Mr Lim.

Mr Khaw said a 2 per cent rejection rate is low.

Also, HDB exercises discretion on a case-by-case basis, he added.

The success rate of appeals for a loan is 36 per cent - which is "pretty high" and "quite good", he said.

Mr Khaw stressed that the Government's social objective of helping citizens own their homes must be "underpinned by prudence".

What the MPs want, for "100 per cent, everyone who puts up their hand gets a loan", is unrealistic, he said.

Pushing beyond the "prudence principle", he said, may lead to problems like the sub-prime mortgage crisis in the United States, which ultimately wreaked havoc on its economy.