HOUSING
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To help tenants affected by the CRP buy HOS flats, a new Mortgage Subsidy Scheme was introduced in July 1998.
Subsidised Home Ownership
Home Ownership Scheme, Private Sector Participation Scheme and
Flat For Sale Scheme
The Home Ownership Scheme (HOS) and Private Sector Participation Scheme (PSPS) were introduced by the HA in 1978 and 1979 respectively to assist low and middle income families to purchase homes at prices below market value. About 266 800 flats have so far been sold to eligible families. These include 84 404 flats produced under the PSPS which makes use of the resources of the private sector to produce flats for sale at subsidised prices. During the year, 12 307 flats and 3 180 flats were sold under the HOS and PSPS, respectively. The schemes were over-subscribed by seven times. In 1987, the HKHS implemented the Flat For Sale Scheme (FFSS) to complement the HOS and PSPS.
Applicants fall into two categories: Green Form or White Form. White Form applicants (i.e. ordinary applicants living in private sector housing) are subject to a domestic property restriction, an asset limit of $700,000, and an income limit of $33,000 per month. These restrictions, however, do not apply to Green Form applicants who are principally public rental tenants, residents of temporary housing areas, cottage areas and interim housing managed by the HA, households displaced by the clearance of squatter areas for development and natural disaster victims.
Affordability is the primary consideration in determining price for HOS flats. Prices also have reference to the market value of comparable private sector developments in similar locations. A discount rate of 40 per cent of market value was used as the basis for setting the prices for the latest phase of HOS flats with additional discount options, varying from 5 per cent above to 5 per cent below the base price.
The Secondary Market Scheme was established in June 1997 for resale of HOS/PSPS/FFSS flats to sitting public housing tenants and those eligible for public rental housing, starting from the fourth year from first assignment. Flat prices are freely negotiated between the parties, subject to the inheritance of the premium liability by the purchasers. Since then, 2 349 applications for sale and 3 432 applications for purchase have been received, 1 004 transactions have been completed and 939 public rental flats have been recovered. HOS/PSPS/FFSS flat owners can also sell their flats in the open market starting from the tenth year from first assignment, subject to payment of a premium.
Home Purchase Loan Scheme
The Home Purchase Loan Scheme was introduced in 1988 to promote home ownership among families in the low income bracket. Eligible applicants are offered an interest-free loan or a monthly subsidy to acquire their own homes.
To enable more families to buy private sector flats, the quota for the Home Purchase Loan Scheme was increased from 4 500 to 10 000 for 12 months from August 1998. New flexible loan options were introduced. Instead of applying for a loan, eligible applicants may opt for a monthly subsidy for 48 months, which need