Saturday, February 7, 2009

Measures To Help New HDB Flat Buyers, Existing Owners

Source : The Business Times, February 7, 2009

THE government yesterday announced measures to help existing HDB home-owners and people looking to buy a new flat.

To meet increased demand for smaller and more affordable flats, HDB will offer 2,000 studio, two- and three-room apartments each year in 2009 and 2010.

This is double last year's supply of 1,000 smaller flats. And National Development Minister Mah Bow Tan told Parliament: 'We will increase the supply of smaller and lower-priced flats further if necessary to meet demand.'

To make it easier for first-timers to buy a flat, the government also unveiled an enhanced Additional CPF Housing Grant Scheme (AHG).

Under this, the monthly income ceiling will be raised from $4,000 to $5,000, the maximum grant increased from $30,000 to $40,000 and the continuous employment condition cut from two years to one year.

The number of families benefiting from the AHG will double from about 4,000 in 2006 to about 8,000 each year.

HDB will also help existing home-owners amid the downturn.

Short-term measures to help those behind with repayments include a deferral scheme and instalment plan to pay arrears within a 'reasonable period'.

Longer-term, HDB is willing to facilitate downgrading by providing second loans on a case-by-case basis.

Mr Mah said that HDB generally does not provide loans to downgraders as they usually have enough proceeds from the sale of a larger flat.

'But for those who need help in these difficult times, HDB will be flexible and will help them with another loan to buy a smaller flat,' he said.

'So there's no overall change in policy, but recognising the situation, HDB will be more flexible to help those in difficulty.'

Elderly home-owners will also get help - through a lease buy-back scheme that starts on March 1.

Under this, HDB will allow the elderly to monetise their flats by buying back the tail-end of the lease at market value, leaving a 30-year lease for the household.

HDB is also tightening eligibility rules for heavily subsidised public rental flats. Now, an applicant's income and assets will also be considered, as well as existing rules.

Those who have previously received a housing subsidy and those who have significant savings or money from a previous flat sale will no longer qualify for a rental flat.

In addition, applicants must not have owned private property before, or have a child who owns private property or has a spare room.

The revised rules take effect immediately and are designed to manage demand and safeguard rental flats for the deserving, so they are not crowded out by the less needy.

Mr Mah said: 'There are now 4,550 applicants on the rental queue. Some are really in need of help, but they are in the queue waiting.'

HDB also plans to accelerate its rental flat building programme. By 2012, there will be 50,000 rental flats, up from 42,000 now.

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