If you have questions on specific details of the case, you might want to check directly with him.
HDB does impose penalties in cases where the buyer is unable to secure a HDB loan of sufficient size and has to cancel his purchase because he can't raise the cash[If it's not income loss, what is it, HDB?] . Some commenters suggest that Admund has tried to buy a flat that is too expensive and should have been more conservative. This is actually irrelevant because the main point is whether HDB should penalize someone for a problem caused by HDB denying them access to sufficient loans. The purpose of imposing penalties for cancellation is to discourage people who are not serious about getting a flat and have no intention of closing the sale from making applications. In this case, the buyer has every intention of going through with the sale but was stopped by HDB denying him access to a 90% loan.
Yes, even people earning $1000 can own a flat....sure Minister Tharman sure!
Admund's plight just highlights how things can go very wrong for someone buying a HDB flat......the most expensive public housing in the world.
When you purchase a HDB flat and wish to get an HDB loan, you will need to first obtain an HDB Loan Eligibility(HLE) letter and the amount of housing loan that can be granted will depend on the buyers' age and monthly income. This letter is valid for 3 months from the date of issue[Link].
When buying an uncompleted flat directly from HDB, your loan eligibility will be subjected to reassessment at the time of flat completion before the loan is disbursed. For the case of BTO which take years to build, a buyer is reassessed when he collects his keys. If this reassessment fails and the buyer has no means to fork out the cash, the buyer will forfeit his option fees and 5% of the price of the flat.
In Admund's case, the HDB assessed him to be well paid so he was not entitled to any HDB grants. He paid $40+K for his down payment but was not able to secure a large enough loan from HDB to procure his HDB flat. Because HDB did not grant him a large enough loan (90% of the price of a flat) and he did not have sufficient cash to make up the difference, HDB made him pay a penalty of $28K and he lost his flat after trying to get one for 7 years.
This is quite amazing isn't it? Imagine in the case of BTO, the flats take years to build and the person gets sick or sees his income falling sharply due to job loss (to FTs?!) , the HDB takes half his down payment as a penalty after rejecting his HLE if he has no cash to pay for his home.
How can HDB penalize someone for something unintentional and out of his own control? The main reason for failing the HLE (re)assessment is the loss of employment, illness or personal misfortune. Imagine the pain caused by HDB penalizing these people - it is unjust and unfair.