Deficit reduction exercise: Secretary for Financial Services & the Treasury Frederick Ma and Hong Kong Mortgage Corporation Deputy Chairman Joseph Yam shake hands after signing the agreement.

The Government and the Hong Kong Mortgage Corporation have signed an agreement today for the sale of government-funded loans under the Home Starter Loan Scheme and the Sandwich Class Housing Loan Scheme.

The sale involves about 36,000 loans granted to eligible families/individuals under the loan schemes for which the Government will receive about $10.9 billion.

Secretary for Financial Services & the Treasury Frederick Ma, who signed the agreement, said the sale of loans under the two schemes is part of the asset disposal programme announced in the 2003-04 Budget.

Noting that existing terms and conditions of both housing loan schemes will remain unchanged after the sale, Mr Ma said the transaction will not have any impact on individual borrowers.

He said the target amount of proceeds from disposal of assets in the current financial year is $21 billion.

Asset disposal helps reduce deficit

Together with the proceeds from the sale of civil-service housing loans in May, the Government has already received a total of $15.7 billion towards this amount, he said. 

"We will continue our work in other areas of the asset disposal programme to achieve the target for the current financial year," he said.

Hong Kong Mortgage Corporation Deputy Chairman Joseph Yam said the acquisition of this sizeable mortgage portfolio will strengthen the corporation's balance sheet and help improve the Government's fiscal position.