More young couples can now buy flats as HDB eases income assessment rules

The Housing and Development Board (HDB) will ease measures to make housing more accessible for young couples who are either working or have just started working.

National Development Minister Desmond Lee announced during an engagement session about public housing at the National University of Singapore on Wednesday (March 26), that starting from the next Build-to-Order (BTO) launch in July this year, young couples in which either one party is studying or serving National Service will be eligible for the Deferred Income Assessment (DIA).

For example, a couple, where one person is earning $3,500 a month while the other is still studying, could only afford to purchase a three-room BTO flat in Yishun previously.

But under the expanded rules, the couple can now apply for their BTO flat and have their HDB housing loan and Enhanced Central Provident Fund Housing Grant assessment deferred for about three years, until the collection of keys.

"At that point, both parties would have started work. With a combined income of say $7,500, they will qualify for a sufficient loan to buy their dream four or five-room BTO flat," the minister said.

Under the staggered downpayment scheme, the initial payment the couple will have to pay will be further reduced from 5 per cent to 2.5 per cent.

To be eligible, couples must have completed their studies or National Service within the 12 months before applying for an HDB flat, with either one of them aged 30 or below.

This expansion of the scheme will benefit a wide range of young couples, such as graduates from universities, polytechnics, and Institutes of Technical Education.

With this, couples will be able qualify for a higher loan amount by the time their income assessments are made, as they would have been employed for a period of time.

'Waiting times shortened'

Additionally, Minister Lee pointed out that efforts have been made to ramp up the number of flats while reducing waiting times.

"We are on track to exceed our commitment to launch 100,000 BTO flats from 2021 to 2025. This is the equivalent of building two Ang Mo Kio towns in less than five years," he said.

"Waiting times have also been shortened to a median of less than four years, comparable to pre-Covid times."

Minister Lee shared that there over 50,000 flats will be launched between 2025 to 2027, with at least 12,000 flats to have shorter waiting times.

He added that that "this is more than what we launched over the last five years, combined". 

The minister also acknowledged that some youngsters might be feeling anxious after seeing resale flats going for more than $1 million.

He assured them that there is a wide range of affordable housing options for different budgets. 

Explaining the new flat classification framework, which categorises flats into Standard, Plus, and Prime categories, he said that it is aimed at limiting the "lottery effect" while ensuring fairness for buyers who do not receive additional subsidies.

"Tighter restrictions are in place for Plus and Prime flats, such as a longer Minimum Occupation Period (MOP), subsidy recovery, and stricter conditions on renting and resale. These restrictions are designed to reinforce the principle of owner-occupation in public housing, reduce the investment value of BTO flats, and limit speculative gains," he added.

Plus and Prime flats have a 10-year MOP and a subsidy clawback. They also have extra subsidies on top of existing BTO subsidies to keep them affordable for first-timers. 

The new Family Care Scheme which will be introduced later this year will give eligible singles priority access when they apply for new flats to live with or near their parents. 

Minister Lee said the government will "continue to update policies to support Singaporeans from all walks of life, at different stages of their life journeys". 

'The scheme was incredibly helpful'

One couple who has benefited from the DIA and staggered downpayment scheme is Ryan Tan and Brina Lim, who applied for their flat in February 2022.

Speaking to AsiaOne, Tan, 27, shared how the schemes helped him and his partner secure a home faster than expected while managing their finances effectively.

"At the time, I was still studying when we applied for our first home. The DIA scheme was incredibly helpful in breaking down our payments and easing the financial burden on us," the maritime operator said.

Lim, a 27-year-old preschool teacher, also expressed her support for the schemes, noting that without them, they might have had to postpone their wedding and future plans.

"It was challenging since we were both just starting out with little savings. The staggered payment plan allowed us to build up our savings and CPF, making it easier to pay when it was time to collect our keys," said Lim. 

The couple has since collected the keys to their four-room flat in Yishun Grove in January this year. 

xingying.koh@asiaone.com

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