20-year occupancy, shorter leases for Fresh Start Housing Scheme homes

SINGAPORE — The approximately 1,000 families likely to qualify for the Fresh Start Housing Scheme will need to stay in their new flat for at least 20 years, so that their children are assured of a stable home environment, but their two-room unit will also come with shorter leases to keep home prices affordable.

The details of the scheme, first announced last year, were revealed by National Development Minister Lawrence Wong during his ministry’s Committee of Supply debate on Monday (April 11). 

To launch at the end of this year, the scheme is aimed at families with young children living in rental homes who had received housing subsidies previously.

Eligible families will be able to buy two-room flats with flexible leases ranging between 45 and 65 years, compared to a typical lease of 99 years for new Build-To-Order flats. The chosen flat must enable the homeowner and his or her spouse to live in the unit till he is 95 years old — for example, a 35-year-old applicant will need to choose a 60-year lease. They will be supported by HDB concessionary loans, and can also use their Central Provident Fund savings for down payment and mortgage payments. 

While some Members of Parliament had expressed concern that the scheme’s conditions might be onerous, Mr Wong said the scheme is a “major move” by the Government.

“I think it’s fair they must be able to show a certain level of commitment towards home ownership,” he said. 

The scheme, he noted, is also about integrating financial assistance with personal responsibility and social support. A Fresh Start Housing Grant of up to S$35,000 will be given, pro-rated according to the lease of the flat that is purchased. 

The first S$20,000 will be disbursed upfront regardless of the chosen lease and the remaining monies will be disbursed over five years after key collection, said Mr Wong.

To qualify for the scheme, the parents — who can be married, divorced or widowed — must be at least 35 years old and below the age of 55, and have at least one citizen child below the age of 16. At least one parent must be a Singapore citizen, be in stable employment in the last 12 months, and have occupied a rental flat for the last two years without accumulating rental arrears of three or more months in the last year.

They will also be assessed by the Ministry of Social and Family Development to ensure that the family is managing its finances well and children are attending school regularly, said Mr Wong. Should they encounter difficulties, discretion will be exercised, taking into consideration their circumstances and efforts made to meet the scheme’s conditions, he said.  

Social workers interviewed said the scheme would help address the financial difficulties faced by those living in rental flats. Ms Rachel Lee, principal social worker at Fei Yue Family Service Centre, added that making regular school attendance a requirement would help families eventually break out of the poverty cycle.

But some were worried that the 20-year minimum occupation period (MOP) requirement was too rigid. 

Hougang Sheng Hong Family Service Centre executive director Sara Tan noted that flexibility would be needed as families’ circumstances improve, while Ms Julia Lee, director of Touch Community Services’ department of social work, said the rule seemed to discourage families from moving forward.

Ms Lee also suggested that social workers helping these families equip the children with life skills like budgeting and handling conflicts, to inculcate a positive home environment.

Asked about the 20-year MOP, and how the expected number of beneficiaries was derived, Mr Wong said the factors considered were the level of savings of this group, and what would be needed to provide a stable home environment.

But should there be families who are able to purchase bigger units during the MOP, his ministry will facilitate these requests, he assured.