New loan among options to help public-rental tenants own homes again

SINGAPORE — A second concessionary loan from the Housing and Development Board (HDB) could be offered to tenants of public-rental housing to help them own a home again under the Fresh Start Housing Scheme, National Development Minister Lawrence Wong said today (Dec 15).

The minister raised the possibility of this new channel of help under the scheme after public-rental tenants shared with his ministry and the HDB that they are unable to get mortgage loans and find it difficult to pay the resale levy in cash, despite their desire to own a home again.

Under the scheme, which was announced at this year’s National Day Rally, second-timer families will receive a grant to buy two-room flats made more affordable by shorter leases and stricter resale conditions.

Writing on his ministry’s blog today, Mr Wong said the flats offered could be under the new 2-room Flexi scheme, which comes with shorter leases and is currently only available to the elderly.

He added that the stricter resale-condition imposed could come in the form of a longer Minimum Occupation Period (MOP), meaning an owner would have to hold on to a flat for a longer time before he can sell it off. The norm for the MOP is five years. Mr Wong did not say what the longer MOP could be under this scheme.

“Taken together, the provision of another housing grant, another concessionary HDB loan, and a shorter lease flat are significant steps to help these families,” he wrote.

He acknowledged that while some larger families may prefer to buy a bigger flat, “it would be more prudent to secure a flat first, and then move on to a bigger unit when they are able to do so”.

Mr Wong also said the HDB is considering a suggestion to disburse the grant under the Fresh Start Housing Scheme in a few tranches over time, subject to certain conditions having been met, instead of a single lump-sum payout.

The idea came from social workers who said these families need hope and motivation to succeed. 

He added that former public-rental tenants who had succeeded in buying flats on their own managed to do so with support from friends, family, Government agencies and community organisations. But “above all, they had a very strong sense of self-motivation”, he noted.

“They all agreed on the importance of securing regular employment, working hard and putting their children through school, so that the problems do not continue with the next generation,” wrote Mr Wong. 

“Given the complex issues families face, some may need more guidance and support before they can commit to home-ownership.”

The minister added that the number of families under the Fresh Start Housing scheme “may not be large to begin with” given that some families may need more guidance and support before they can commit to home-ownership.

“But it’s better to start the scheme on a sound footing, and then see how it can be expanded over time to benefit more families,” he said.