Strict criteria for applying a new loan scheme to improve building safety will be too harsh for flat owners, a lawmaker said yesterday. The scheme will merge building safety improvement loans and fire safety improvement loans in July. The total funding is $700 million. Between 1998 and February, 495 applications were received for the building safety loan scheme, with 400 approved, involving $14.8 million. However, there was only a lukewarm response for fire safety loans, with five applications and $156,000 granted. At the Legco planning and lands panel, officials said the rate of interest charged had still to be decided, but the Director of Buildings may grant an interest-free loan to needy applicants based on an assessment of income and assets. However, Democrat Albert Chan Wai-yip said it was unreasonable for the Government to use the Comprehensive Social Security Assistance income limits as a guide when considering approving interest-free loans for CSSA recipients because the Social Welfare Department had tightened those limits. Mr Chan said: 'I don't believe many will apply for your loans because you don't offer much and the applicants need to meet harsh criteria.' The Planning and Lands Bureau said it would be careful in examining interest-free loan arrangements. Deputy Director of Buildings, Cheung Hau-wai, said the department would consider applications on a case-by-case basis as the expenditure of each person and each family was different. He said officials would use the CSSA income limits but not necessarily follow them exactly. It is planned that owners who carry out repairs to their building will get no more than $1 million per flat. A bank guarantee is required for loans over $100,000. Repayments would be made over 36 months, but could be extended to 72 months for those in financial difficulty.