Yesterday, the Ministry of National Development (MND) provided additional insights into the announcements made during the Singapore Budget 2024 speech in February.
Among these initiatives are S$300 rental vouchers under the Parenthood Provisional Housing Scheme (PPHS) and reduced down payments to aid young couples in their home-buying journey.
Here are more details on these plans and when they’re set to roll out:
Rental vouchers under PPHS
Eligible families waiting for BTO units can receive rental vouchers of S$300 a month to offset rent for an HDB flat or bedroom on the open market.
The initiative aims to provide additional support as the Housing Board adds another 2,000 vacated flats in Tanglin Halt to the temporary homes stock under PPHS from the second half of 2025. This brings the total to 4,000 by 2025, meeting the demand for such flats among eligible families, and reducing the need to lease flats from the open market.
Ismail Gafoor, CEO of PropNex, highlighted that while the vouchers provide relief, families may still face a substantial rental cost in the interim. The rental rates of PPHS flats vary depending on location, ranging from S$400 to S$550 per month for 2-room flats and S$600 to S$900 per month for 3-room flats.
“At S$300 per month, the PPHS voucher amount will certainly help to defray some rental expenses but the sum is on the modest side, considering the difference in rental rates of PPHS HDB flats and those on the open market”, he added.
Assistance for young couples
Young couples applying for unfinished five-room or smaller flats under various schemes will receive assistance.
Full-time students, national servicemen, or recent graduates may defer their income assessment for the Enhanced CPF Housing Grant and an HDB housing loan until just before collecting the keys to their flat.
Not sure which HDB grants you’re eligible for? Read our ultimate guide here: HDB grants for couples – Quick guide (with updated infographic) to resale HDB and BTO grants for couples
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Reduced initial down payment
Starting from the BTO sales exercise in June, the upfront down payment for couples eligible for the deferred income assessment will be lowered to 2.5% of the flat price under HDB’s Staggered Downpayment Scheme. This would be quite a significant drop from the current requirements of a 5% downpayment for an HDB loan or no loan and 10% for bank loans:
Payment plan under SDS for households eligible for deferred income assessment
| Currently | From June 2024 | |||
| Loan type | Initial downpayment | Payment at key collection | Initial downpayment | Payment at key collection |
| No loan | 5% | 95% | 2.5% | 97.5% |
| HDB housing loan | 5% | 15% | 17.5% | |
| Bank (FI) loan* | 10% | 15% | 22.5% | |
*Assuming for 75% LTV (Loan-to-value limit). Data source: The Straits Times.
This aims to ease the initial cost for young couples when buying a flat.
Mr Gafoor emphasised the impact of this change, citing an example where the down payment for a S$420,000 4-room BTO flat in a non-mature estate would be reduced from S$21,000 to S$10,500.
Planning and applying early can be beneficial, as the flat would likely be completed and ready for occupation by the time the couple graduates and secures full-time employment.
Read more on the Staggered Downpayment Scheme here: Understanding HDB downpayments: A comprehensive guide
Challenges faced by young couples
Despite these measures, some young couples may still encounter difficulties with the initial down payment due to disbursement timelines for the Enhanced CPF Housing Grant.
According to HDB, some young couples might find it tough to cover the initial down payment because the Enhanced CPF Housing Grant, which can go up to S$80,000 if they qualify, is given out closer to when they collect their keys. This implies they’ll need to dip into their savings for the first payment.
For buyers taking HDB loans, the total down payment required is 20% of the unit’s price. If they opt for bank loans, it increases to 25% of the flat price.
HDB has processed about 3,800 flat bookings from young couples who qualified for the deferred income assessment from May 2018 to December 2023.
Read more: Should you refinance your home loan in post-Budget 2024?
Future Voluntary Early Redevelopment Scheme (Vers)
Another thing to keep an eye on? The government is developing plans for the Voluntary Early Redevelopment Scheme (Vers), where owners of flats aged 70 years and older can vote for the government to buy back their homes before their leases run out.
However, since the initiative involves navigating through various complexities and challenges – like managing the redevelopment of older areas within towns while ensuring minimal disruption to residents in newer neighbourhoods – it’s safe to say that its implementation could take some time.
As always, we’ll keep you updated on any and all progress!
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What do you think of the vouchers, schemes and downpayment assistance? Share them in the comments section below or on our Facebook page.
This article is a product of 99.co and is based on information gathered from various sources, including The Straits Times. The usage of these sources was done in good faith to provide valuable insights. The sources of the referenced content are duly credited and we recommend readers to refer them for a comprehensive understanding of the topic.
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