Govt to increase subsidies for public rental households to own their homes

SINGAPORE — To help second-timer public rental households with young children own a home again, the Housing and Development Board (HDB) will raise the Fresh Start Housing Grant from S$35,000 to S$50,000, National Development Minister Desmond Lee said on Tuesday (March 8).

Under the enhanced scheme, eligible households will get an upfront disbursement of S$35,000 when they collect the keys to their new owned flats. Another change is to allow them to buy three-room flats with a shorter lease.

Currently, the grant allows eligible families to buy only two-room flexi flats. These flats cater primarily to senior citizens but are also open to families buying flats for the first or second time, subject to qualifying criteria.

The grant, which was introduced in 2016, is meant to help families with young children living in public rental flats to buy own their flats, but were not able to qualify for housing subsidies since they had received a subsidy in the past.

Announcing the changes during the debate on Ministry of National Development's spending plans, Mr Lee said that other than the increase in grants, it will also be the first time that the scheme will offer new three-room flats on shorter leases.

He said that the move is to provide families with more housing options.

"It is a substantial change that we’re making in our housing policies, to support lower-income families and their children, as they seek to improve their lives."

Dr Faishal Ibrahim, Minister of State for National Development, said in Parliament that grants such as the Fresh Start Housing Grant "ensure that public housing remains affordable and accessible, especially for lower-income families".

He also encouraged all families living in rental flats to "aspire and work towards home ownership", adding that between 2019 and 2021, more than 2,200 rental households have moved into flats of their own.

"The Government and community will support and complement your efforts, as you work towards better lives for yourselves and your loved ones," he added.

HOW THE ENHANCED GRANT WORKS

After eligible families receive an upfront disbursement of S$35,000 upon key collection, another S$15,000 will be disbursed into their Central Provident Fund's Ordinary Account in equal tranches over five years, a joint media statement by MND and HDB said.

Currently, eligible families are disbursed a grant of S$20,000 at key collection, before the extra S$15,000 is disbursed in equal tranches over five years after key collection. 

Under the current scheme, families may buy two-room flexi flats with lease lengths of 45 to 65 years in five-year increments.

Families will now have the option to buy three-room flats with the same lease lengths — 45 to 65 years in five-year increments — as long as the lease of the flat can cover the youngest applicant or spouse-occupier up to the age of 95.

“These shorter-lease three-room flats will be more affordable, while ensuring families still purchase a home for life.”

Families will also attend annual “social assessments” by HDB and receive social support from an appointed social service agency. 

Flats sold under the Fresh Start Housing Grant scheme will also continue to have a 20-year minimum occupation period, to “ensure a stable home for the families and children”, the statement said. 

The minimum occupation period is the period of time that homeowners are required to physically occupy the flat before it can be resold on the open market.

These measures seek to “make owning a flat more affordable for second-timer families with children and who are living in public rental flats”, HDB and MND said. More details of the changes will be announced when they are ready.