Upgraded Staggered Down Payment Scheme to Help More Young Couples Buy New HDB Flats

SDS allows couples, especially young ones, to pay for their HDB flats in two instalments. First, they can make the initial deposit when signing the Agreement for Lease. This must be done within nine-months of booking. Second, the rest is due at the time of key collection.

Depending on your chosen financing method, you can pay a down payment of 5 or 10%. Comparatively speaking, most HDB housing loans are 10 per cent and financial institution loans are 20 per cent. For some couples, a reduced initial deposit of 5 per cent under the SDS still represents a significant financial hurdle.

Lee stated that from the latter half of the year, singles are allowed to purchase 2-room flexi BTO apartments on an island-wide basis. Also, the government is increasing flat supply.

Rental vouchers

Lee added that families eligible for HDB flats who are still waiting will get S$300 per person per month in order to rent out a room or flat on the open-market.

The S$300 is a voucher that can be used to rent HDB flats for families in need.

The S$300 amount was carefully calculated to provide relief for some families, and mitigate inflationary impacts on the market for other families.

Families are defined as a couple who have at least one new buyer in the marriage, a divorced/widowed parent with children or applicants for the Fiancee scheme. In addition, they must have a maximum household income (S$7,000) and a rental lease registered with HDB. Those who rent from immediate family and close relatives are not eligible to receive vouchers.

The scheme runs for a full year, starting July 2024. Meanwhile, the government is ramping up its supply of PPHS units – doubling their supply from 2,000 flats to 4,000 by 2025’s second half.

Both measures, say analysts, are likely to make public housing affordable and more accessible for young people.

The downpayment reduction allows young couples eligible to apply for Plus and prime flats. These are usually more expensive and would not have been within reach.

In order to assist such households, there are a number of measures. These include a decrease in their initial expenditure and S$300 for each month’s rent on the open markets. Desmond Lee announced Tuesday, March 5, that the Staggered Downpayment Scheme has been revised to allow for a lower initial payment for some young couples.

The announcement of the extended support came during the Committee of Supply discussion of Ministry. The changes are designed to make it easier for young couples to settle early, even if they may not qualify to receive a suitable housing loan.

Couples eligible to defer an income assessment to the HDB and the Enhanced Central Provident Grant will be able to reduce their initial deposit to 2,5 per cent regardless of financing options.

If the couple delays their income assessment they are more likely eligible for EHG. EHG is a program that requires at least one member of the couple to have worked continuously for an entire year. If they have been working for a period, they might also qualify for an increased loan amount.

Since 2018, SDS has assisted more than 3700 couples to use the deferred Income Assessment, allowing them to start their home buying journey early and reduce their upfront expenses. I am hoping that couples who are looking to buy a house and have been saving for the downpayment will benefit from this improvement.

The Progress Singapore Party is proposing to allow singles access to public housing from a younger age. But this may cause BTO application rates to spike and resale pricing to soar.

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Couples that are eligible must be currently full-time university students, recent college graduates or National Servicemen. At least one of the parties must be 30 or younger, and they must be either married or applying to get a flat in the Fiance-Fiancee Programme.

The revised scheme takes effect with the next Build-to-Order sale launch in June of this current year.

Christine Sun said, OrangeTee Group’s Chief Researcher and Strategist, that PPHS can help eligible households offset anywhere between 15 to 25 percent of their rental cost, considering the median rent for neighbourhoods such Punggol & Geylang is S$1,175 – S$1,825 amonth.

There is little chance that the vouchers will cause inflation on the HDB housing market, since they are only temporary and do not amount to a large sum.

Most leases on the open rent market last for two to three years. If the vouchers run out, then there may be difficulties for the couple. The number of people who will use the vouchers (is) unlikely to be large, as it is too little and does cover only the first two years.

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