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The following is issued on behalf of the Housing Authority.
The Housing Authority (HA) approved the granting of further relief measures for its loan recipients by reducing the monthly repayment by half for a maximum period of 12 months with a view to helping them to tide over short-term financial difficulties.
The Chairman of the Authority's Subsidized Housing Committee (SHC), Mr Ng Shui-lai, said today (February 19) that loan recipients in financial difficulties would be able to sustain their loan repayments with the new relief measures, without which, these loans might either run into delinquency or default.
"The new package, though at a cost to the HA, represents a win-win situation for all involving parties, including the loan recipients, the Authority, the Hong Kong Mortgage Corporation Limited (HKMC) and the participating banks," Mr Ng Said.
The Committee noted that since the introduction of the first package of relief measures to loan recipients in May 2002, some 550 recipients had had their loan repayment re-structured, by freezing the repayment of the principal of the bank loan, and/or extending the repayment period of the bank loan from 20 years to 25 years.
However, the existing arrangement, which is restricted to the bank loan alone, could not adequately help relieve the short-term financial difficulties of some loan recipients, especially those who had opted for a relatively smaller amount of bank loan.
"In view of the prevailing economic environment and the financial situation of the Authority, we think that offering a comparable assistance to recipients of the HA loan in genuine need, should be welcome by the general public," he said.
"The relief is in the form of a 50% reduction in the monthly repayment of HA loans for a maximum period of 12 months with provision for the deferred repayment to be recouped evenly over the residual period of the loan term," he said, adding that the deferred repayment of HA loans should run in parallel with the existing relief measures offered by the banks.
As over 90% of the HA loans have been sold to the HKMC, agreement has been sought with the Corporation to provide the new relief measures.
To target assistance to loan recipients in genuine financial difficulties, the SHC also approved a set of criteria to be adopted when considering applications from recipients under Home Purchase Loan Scheme and Home Assistance Loan Scheme currently administered by the HA.
These criteria including:
(a) The monthly household income of the applicant has dropped by 15% or more as compared with the income level at the time of loan application;
(b) The monthly aggregate of the applicant's current bank loan repayment and HA loan repayment exceeds 50% of his/her monthly household income; and
(c) The net assets (excluding the mortgaged property) of singleton and family applicant do not exceed $80,000 and $120,000 respectively, and there is no other means with which the applicant can continue with the loan repayment.
Mr Ng said that the Authority would base on the recommendation from the participating banks regarding the repayment capability of the loans recipients when approving the applications for relief measures. Letters will be sent to participating banks to inform them of the details of the new relief measures.
Ends/Thursday, February 19, 2004
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