Housing Authority extends mortgage guarantee and repayment periods for subsidised sale flats

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23rd February 2024 – (Hong Kong) The Hong Kong Housing Authority (HA) has announced its decision to extend the maximum mortgage default guarantee period and repayment period for subsidised sale flats (SSFs) sold under the HOS Secondary Market Scheme (SMS), effective from 1st March, 2024. These arrangements will apply to all new mortgage loans taken out on or after the launch date to finance the purchase of Home Ownership Scheme (HOS), Green Form Subsidised Home Ownership Scheme (GSH), and Tenants Purchase Scheme (TPS) flats transacted in the SMS.

In line with the measures outlined in the 2023 Policy Address, the HA Subsidised Housing Committee had previously approved the relaxation of mortgage arrangements for SSFs. This involved extending the maximum mortgage default guarantee period and mortgage repayment period under the Deeds of Guarantee provided by the HA. The aim was to facilitate SSF purchasers in obtaining mortgage loans from participating financial institutions, including banks.

“The relaxation of arrangements for the primary market has already been implemented. With regard to the SMS, starting from 1st March, we will extend the maximum mortgage default guarantee period to 50 years for HOS and GSH flats, and to 50 years for TPS flats,” stated an HA spokesperson. For the initial 40 years, the HA will provide a mortgage default guarantee to participating financial institutions for up to 95 percent and 90 percent of the assessed value or purchase price of the flat (whichever is lower) for Green Form (GF) and White Form (WF) applicants, respectively. From the 40th year onwards until the 50th year, the mortgage default guarantee will cover up to 80 percent of the assessed value or purchase price of the flat (whichever is lower). If the loan-to-value (LTV) ratio exceeds 80 percent, SSF purchasers may consult with participating financial institutions regarding their eligibility to apply for a mortgage loan under the Mortgage Insurance Programme (MIP) offered by HKMC Insurance Limited (HKMCI). The HA has reached an agreement with HKMCI to allow SSF purchasers in the SMS to apply for mortgage loans under the MIP, with an LTV ratio of up to 95 percent for GF applicants and 90 percent for WF applicants.

Additionally, the maximum mortgage repayment period for HOS, GSH, and TPS flats sold under the SMS will be extended from 25 years to 30 years.

Starting from 1st March, 2024, SSF purchasers who wish to apply for a mortgage loan under the HKMCI’s MIP can submit applications to participating financial institutions. Further details and highlights of the MIP can be found on the HKMCI’s website from 1st March, 2024 (www.hkmc.com.hk/eng/our_business/mortgage_insurance_programme.html). For any inquiries, individuals are advised to reach out to participating financial institutions or contact HKMCI at 2536 0136.