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Lower downpayment of 2.5% for eligible couples applying for Singapore HDB flat starting June 2024
Singapore couples must meet the criteria for a deferred income assessment to benefit from the lower initial downpayment amount when they buy a HDB flat..
SINGAPORE — Eligible young couples will soon be able to apply for a Housing and Development Board (HDB) flat with a lower initial downpayment of 2.5 per cent of the flat price starting from June 2024, said Minister for National Development Desmond Lee.
The minister announced the revision of the Staggered Downpayment Scheme (SDS) along with various public housing initiatives during his ministry's debate in parliament on Tuesday (5 March). Enhancements to the SDS will apply to young couples who are eligible to defer their income assessment.
What is a deferred income assessment?
The deferred income assessment was introduced to help young couples who want to secure a Build-To-Order (BTO) HDB flat early but do not yet have an income for assessment, which is a necessary requirement when applying for an HDB loan or the Enhanced CPF Housing Grant (EHG).
The deferment will allow them to apply for a new flat first and defer their income assessment to just before key collection, when they are more likely to have an assessable income to qualify for the EHG and a higher loan amount after working for some time. Young couples must be current or recent full-time students or National Servicemen to qualify for an income assessment deferment.
What is the Staggered Downpayment Scheme (SDS)?
Young couples eligible to defer their income assessment can then benefit from the SDS, where the initial downpayment payable when they sign the Agreement for Lease (AFL) is lowered by half.
Currently, couples who book an uncompleted BTO flat must pay an initial downpayment of five to 10 per cent of the flat price, while the remaining downpayment is payable at key collection when they take up a housing loan and receive the EHG, if eligible, to pay the balance of the flat price.
Under the revised SDS, the initial downpayment will be further reduced to 2.5 per cent starting from the June 2024 BTO sales exercise, regardless of the chosen housing financing option. The minister said the initiative is designed to support young couples who may still face difficulties paying the reduced initial downpayment.
"We hope that this enhancement will help you to settle down earlier and start a family earlier," said Lee in parliament.
More housing in Yishun and Bukit Merah to meet demand
Separately, the minister also announced plans to develop two new housing areas to meet housing demand, namely Chencharu in Yishun and Gillman Barracks in Bukit Merah.
Around 10,000 new homes, of which 80 per cent will be set aside for public housing, are being planned for Chencharu, located near the Khatib MRT station. The first BTO project in the area, comprising about 1,200 units of two-room flexi to five-room flats, will be launched in June, with the rest of the projects to be progressively launched in the coming years.
As for the Gillman Barracks area, the government is studying the possibility of introducing a new residential neighbourhood at this site, comprising a mix of public and private housing options. Environmental and heritage studies will be conducted in the area in the second quarter of 2024.
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