Here’s a unique HDB-related case for a friend of ours, say, his name is John.
John’s father is bankrupt. Bankrupts can still own a HDB flat if they get an Official Assignee’s approval (it’s a lawyer approval). I guess in his father’s case, they couldn’t get the approval.
Hence, John bought a BTO with his mother in Tampines, and the 3 of them currently stay in this 3-room HDB flat.
However, John just got married, and the newlyweds are thinking of getting their own BTO. “How can I remove my flat from my HDB flat?” I heard him say.
What I understand is that for HDB, the HDB loan is also tied to the HDB ownership. Meaning, if John removes his name from his Tampines flat, John will have to remove his name from the HDB loan for this Tampines flat. The trouble is that HDB has income requirements for John’s mother for the Tampines flat loan, and she isn’t working. Plus, HDB can’t give HDB loans to anyone above 65 years of age.
So, John can’t remove his name from the HDB loan.
So while John can simply transfer ownership to his mother anytime, he can’t shake off the HDB loan.
So, there are now 2 options:
Sell off this 3-room Tampines flat, and downgrade the parents to a 2-room flat. What I understand is, because the parents are not working, they can’t take any loan. So, they are going to be on a flexi scheme, which means must one shot pay off everything. So, John will have to take a personal loan from a bank, I guess, in order to pay upfront.
Also, they have to repay the CPF that’s been used first. After they settle that, then only can they ask CPF if they can use 100% of the sum to pay off the next 2-room flat.
Sell off the Tampines flat, and then BTO a new 4- or 5-room flat, so that it’s bigger for John, his wife, and his own parents. What I understand is it’s possible for John and his wife to apply for the 4-room BTO now, and only look for a buyer for the Tampines flat upon collection of the new BTO keys.
Note: Above info was consolidated after 4 calls made to the HDB Branch Office Hotline: 1800-225-5432.
By the way, the Tampines flat is new, so John and his parents have only stayed there for 3 years. By right, cannot sell the flat if haven’t met the 5-year mark, but I guess they’ll have to appeal as well.
Wishing them the best in finding a new home, or getting a bigger house.