Officials have been urged to close a loophole which allowed a family to apply for a subsidised loan for a $7 million home in Mid-Levels. The family was among 190 who passed the means test for the Home Starter Loan Scheme, aimed at helping low to middle-income earners. Only families earning less than $70,000 per month, who had not owned property for 10 years and had assets of less than $1.2 million, were eligible for the $600,000 loan. 'We are still investigating why the family could consider buying such an expensive flat. We have not yet granted the loan,' said a spokeswoman for the Housing Society, which runs the scheme. She said the family's eligibility had been confirmed, but they would have to return to the housing body for final loan approval. The spokeswoman said that borrowing money from friends and family on top of the loan would not violate the rules. The case is understood to involve a flat at the Grand Panorama in Robinson Road, overlooking Victoria Harbour. The housing body has granted loans for less than 100 cases since the scheme began in April. Ninety per cent of the cases were for flats of less than $2.5 million. The most expensive flat was $3.5 million. Michael Choi Ngai-min, managing director of Hong Kong Property, said the loophole in the scheme had been exposed, because there was no ceiling on the flat's price. 'It violates the spirit of the housing scheme which is aimed at helping those who cannot afford to buy an appropriate flat at the current price level,' said Mr Choi. 'Setting a price ceiling for flats would be a solution for that,' he said. He said the ceiling could take into account applicants' ability to afford monthly repayments as well as the downpayment. 'Under these criteria, a maximum price could be fairly set at about $5 million,' said Mr Choi. But the Housing Bureau said the existing mechanism was adequate. 'Properties purchased with the Home Starter Loan Scheme are subject to resale restrictions, so that beneficiaries are unable to keep any gain in the property value if it is sold within three years, or to deter the use of the loans for speculative purposes,' the spokesman said. 'Banks also served as gate-keeper to ensure the families could actually afford the property,' he said.