I refer to the letter, 'How can a single mother of three afford a five-room flat?' by Madam Kok Wee Ming (June 20).

HDB provides concessionary interest-rate housing loans to two main groups: one, first-time buyers to set up home; and two, second-time buyers who wish to and can afford to upgrade their home.

HDB does not grant a concessionary loan to second-time households that are downgrading or buying a flat of the same size. This is because such households can generally use the sales proceeds from their first flat to finance the purchase. Alternatively, they can seek mortgage financing from the banks.

In Madam Kok's case, she has sold two HDB flats previously with profits. She has also previously enjoyed one HDB concessionary loan. Hence, she is not eligible for a second HDB concessionary loan unless she is upgrading to a larger flat. She should use her previous sale proceeds to finance the purchase of a smaller flat.

Nonetheless, HDB recognises there may be some second-timers who are required by circumstances to buy smaller flats.

HDB is prepared to consider granting them an HDB loan on a case-by-case basis, if they are unable to obtain a loan from the banks.

HDB has written to Madam Kok for more documentation to evaluate her appeal.

Quek Kwong Phow
Deputy Director (Admin & Accounting)
For Director (Estate Administration & Property)
Housing & Development Board

This article was first published in The Straits Times on 4 July 2008.