Yahoo Finance Updated housing scheme provides fresh start to second-timer rental households
The Fresh Start Housing Scheme will make 2-room flats more affordable for families living in rental units, with stricter conditions such as shorter leases.
Introduced at the 2016 National Day Rally by Prime Minister Lee Hsien Loong, the Fresh Start Housing Scheme aims to financially assist struggling families with young children to purchase a home.
Second-timer families are those who have previously owned a subsidised HDB flat but have since sold it and are now living in rental flats. The subsidies can come in many forms, such as buying a BTO flat, using the CPF Housing Grant to purchase an Executive Condominium (EC) unit or resale flat, or receiving any Selective En-bloc Redevelopment Scheme (SERS) benefits.
Families who qualify under the Fresh Start scheme can buy a new 2-room Flexi flat or 3-room flat. These units are kept affordable with a shorter lease of 45 to 65 years while its Minimum Occupation Period (MOP) of 20 years ensures a stable home environment for the children.
Forms of support such as counselling services will also be provided for the families.
Experts believe that enabling these households to own a home will encourage them to focus on other issues, build more stable relationships, and prevent their children from unsavoury influences, which rental-flat environments can bring.
More loans available
Families eligible for the scheme can apply for loans from Housing Development Board (HDB) despite past applications and could make use of their Central Provident Fund (CPF) to pay for down-payment and subsequent mortgage instalments.
2022 updates
In 2022, the Fresh Start Housing Grant was increased from S$35,000 to S$50,000. Families will receive an upfront disbursement of S$35,000 into their CPF Ordinary Account upon collecting their keys, which is pro-rated according to the lease of their purchased flat.
Another S$15,000 will be disbursed into their CPF Ordinary Account over five years. These changes will be implemented from the May 2022 HDB sales launch.
Resale levy is also capped at S$30,000.
The current lease lengths for the 2-room Flexi flats on the Fresh Start Scheme range from 45 to 65 years, in five-year increments. To cater to varied housing needs, HDB has decided to open the option of 3-room flats with the same lease length to eligible families, as long as the lease of the flat will be able to cover the youngest applicant or spouse-occupier up to 95 years old.
Eligibility for the Fresh Start Housing Scheme
The applicants must form a second-timer family nucleus
The age range of the applicant and his/her spouse (if applicable) must be between 35 to 55 years old (Applicant(s) may be married, divorced, or widowed)
Application must have at least 1 Singapore Citizen (SC) parent, and at least 1 SC child aged 18 or younger
At least 1 applicant (either the applicant or his/ her spouse) currently has stable employment in the preceding 12 months and is under employment at the point of application
The average gross monthly household income cannot exceed S$7,000
Occupied a public rental flat for at least 1 year
No accumulation of 3 or more months of rental arrears in the preceding 12 months
Have not received any public rental tenancy discount under Relocation, Sale of Flat to Sitting Tenants, or Rent & Purchase Scheme
Do not own other properties overseas or locally, and have not disposed of any within the last 30 months
Qualify for the Letter of Social Assessment (LSA) from HDB*
Undergo annual review by HDB to renew their LSA until 5 years after key collection. The family may need to attend face-to-face interviews with HDB officers.
*To qualify for the LSA, the family will be assessed based on
Family stability
Employment stability
Ability to manage their finances well
Regularity of school attendance for all children below 16 years old
The LSA will be valid for 1 year.
Other notable conditions
If the applicant and/or co-applicants do not apply for a flat within the 1-year validity period of the LSA, the Fresh Start and HDB loan applications will be cancelled.
To collect the keys to a flat booked under the Fresh Start Housing Scheme, the LSA must be renewed annually and be valid when the flat is ready. If the LSA isn’t renewed before its expiry, the flat and HDB loan applications will be cancelled, and 5% of the flat price will be forfeited.
The lump sum Fresh Start Grant disbursement made before key collection and HDB housing loan may only be used to pay for a maximum of 85% of the flat price. If an uncompleted flat is booked, 15% downpayment must be made using CPF and/ or cash savings ‒ 10% upon signing the Agreement for Lease and 5% upon key collection. If a completed flat is booked, the balance 15% payment must be made using the applicant’s own CPF and/ or cash savings.
Each disbursement of the Fresh Start Grant is subject to successful annual renewal of the LSA with HDB.
If a flat is purchased under the Fresh Start Housing Scheme, applicants would have enjoyed two housing subsidies and will no longer be eligible to buy a flat from HDB.
Meanwhile, qualified families would also have to put in effort to work towards homeownership by maintaining a stable financial income and to ensure that their children get their education.
They will also attend annual social assessments by HDB and receive social support from an appointed social service agency.
Although only a minority would qualify for this scheme, “I believe the scheme can and will have a meaningful impact on the families we are reaching out to,” Minister of National Development Lawrence Wong said, according to Channel News Asia.
Are you getting a second subsidy from HDB? Let us know in the comments section below.
If you enjoyed this article, you might be interested in Compare and Contrast: BTO vs. EC vs. Private Condo and Is your HDB flat an asset or liability?.
The post Updated housing scheme provides fresh start to second-timer rental households appeared first on .
