Below article from The New Paper
Search for dream home turns into nightmare
Couple can't buy flat and
may forfeit $8,000 in fees because they can't get housing loan
By Desmond Ng
May 21, 2008
AFTER several failed
attempts to get a new HDB flat, he was ready to give up and pay more for a
Click to see larger image
A preview of CityView @
BoonKeng, which will be ready in 2011. -- ST File picture
Then, home-buyer Dave Tan
had a stroke of luck - or so it seemed. He found a new five-room HDB flat at
City View @ Boon Keng.
This is the second public
housing project to be built and sold by private developers. Hoi Hup Sunway
Development is the developer.
Even though it cost a
whopping $675,000 - not cheap for a new HDB flat - Mr Tan was okay with the
But his happiness was
The 30-year-old and his
fiancee, who are getting married next year, found out that they may not be able
to finance their new home.
They are having difficulties
securing a home loan and may even have to pay a penalty to give up the flat.
The couple's combined income
is about $6,000, said Mr Tan.
They put up an option fee of
about $33,000 for the flat two months ago.
But the Housing Development
Board (HDB) rejected their loan application for 90 per cent of the cost of the
flat last month.
This is because Mr Tan's
director's fee can't be used for credit assessment, and his fiancee didn't have
the pre-requisite three months of continuous employment for the same company.
Mr Tan runs a serviced
His fiancee quit her last
job in February and started work as a personal assistant last month.
Upon appeal, HDB said they
will be willing to give the couple a loan of about $150,000, but rest will have
to be paid in cash and out of their CPF.
Mr Tan said: 'Where can I
find so much money to pay for the flat?
'We were very happy when we
managed to get the flat. But with this loan issue, I really doubt we can afford
to get the place now.'
The 714-unit condo-like
development will be ready only in2011.
Mr Tan said he and his
fiancee had tried balloting for a new flat three times last year.
On two occasions, the flats
they wanted were already taken up. On another occasion, they didn't get a
chance to choose a unit because all were taken up.
Mr Tan said he had
approached afew banks for loans, but the maximum they would lend was about
$400,000, still about $270,000 shy ofthe purchase price.
To make matters worse, if he
defaults on this flat purchase, he'll have to pay a penalty of about $8,000 to
the developer. This is about 25 per cent of the option fee which he paid for
'The developer said that
since the sale didn't go through, we have to forfeit part of the option fee,'
'My girlfriend is so upset
that she cried and lost so much sleep over the penalty. She said she has never
lost so much money before in her life.'
The couple had borrowed the
money to pay the option fee from their relatives.
A very frustrated Mr Tan
thinks that it's unfair to be penalised because it wasn't a case of them not
wanting to proceed with the deal.
Rather, they can't accept
the deal now because of loan problems.
A spokesman for Hoi Hup said
that in cases where the applicants do not meet the eligibility requirements for
the flat, there will be a full refund of the option to purchase fee.
But if the withdrawal to buy
the flat is due to other reasons, such as loan issues, the applicants face the
prospect of forfeiting 25 per cent of their option fee.
The spokesman declined to
comment on the above case and would only say they are reviewing MrTan's appeal
to waive the penalty.