News has it that the government is making it easier for young couples to buy their first HDB flat starting in June.
And here’s what they are going to do:
Lower the initial down payment from 20% to just 2.5% of the purchase price.
What are the requirements?
Right now, couples, where one is a full-time national serviceman, student, or recently completed their studies or national service in the last year, can defer having their income assessed until right before they get the keys.
This is because if they were assessed earlier, they might not qualify for grants like the Enhanced CPF Housing Grant (EHG), which requires being employed for at least a year.
By waiting until key collection to check income, the couples have a better chance of getting the grant or even qualifying for a higher loan amount.
Other requirements for deferred income assessment include one person being 30 or younger.
The couple must also be married or applying together under the Fiance-Fiancee Scheme, where the minimum age is 21.
Down payment benefits
Additionally, young couples currently have the option to split the minimum 20% down payment into two installments.
The first is either 5% or 10% depending on the loan, and the second is due at key collection.
Image Credits: unsplash.com
Since 2018, over 3,700 couples have used deferred income assessment and staggered down payments to make it easier to buy their first flat earlier.
Now, the government wants to help reduce the initial costs even more.
For some, the reduced initial down payment of just 2.5% will significantly lower the financial barrier to owning a home.
The changes take effect starting with the BTO sales launch in June.
Additional rental vouchers
Families who qualify for the Parenthood Provisional Housing Scheme (PPHS) will also get temporary $300/month rental vouchers while waiting for their new homes to be completed.
HDB is doubling the supply of rental flats they provide to help meet demand.
In the interim, the government will provide eligible families vouchers for a year starting in July to help cover renting an HDB flat or bedroom on the open market.
The $300 amount was carefully set to provide relief without over-inflating rental prices for others.
To qualify for the new vouchers, families must meet the PPHS requirements and have a rental tenancy registered with HDB when applying.
Those eligible will get reimbursed based on how long their approved tenancy falls within the year.
With that said, renting from family members won’t count.
More details will be shared closer to the official launch so stay tuned if you’re eyeing this segment from the government.