A loophole which allowed a family to borrow from a government scheme to buy a $7 million flat is to be closed, the Government said yesterday. Housing officials reacted angrily after it was disclosed that a loan of $600,000 had been approved by the Housing Society for a luxury Grand Panorama flat in Robinson Road, Mid-Levels. Only families with income not exceeding $70,000 a month, who have owned no property in the past 10 years, and have assets of not more than $1.2 million are eligible for the scheme. The family involved had apparently been lent the rest of the money by relatives. 'The Government is very concerned about this case and we will not allow it to happen again. It has violated the spirit of the scheme to help low- to middle-income earners own homes,' said Leung Chin-man, Acting Secretary for Housing. But he said the $7 million flat was unique. Most successful applicants opted for flats under $2.5 million. 'The case did not involve a fake declaration, so the Housing Society had to release the funds after seeking legal advice,' he said. The Housing Bureau will now study whether a price ceiling should be set out for flats. It will also consider requiring applicants to declare whether they plan to borrow money from relatives and to give a price range of flats they are looking for. But Mr Leung was unable to say how the Government could stop at least 2,000 applicants who have secured preliminary approval for loans from using the same loophole. 'These 2,000 cases have only passed the first round of tests,' he said. 'It still takes time for them to look for a flat and come back for final approval. 'We will try our best to find a solution during this time.' He defended Tuesday's announcement that the loan scheme would be extended to public housing tenants, a move criticised as a misuse of public money. 'All we hope for is to add flexibility to the scheme,' he said. 'If the public housing tenants are eligible, why do we have to bar them from applying?' Mr Leung dismissed claims the revised policy was aimed at rescuing the property market.