For a young couple in Singapore, starting a family often comes with purchasing an apartment. The majority of young couples will have a HDB flat as their first home purchase as it is more affordable than private property. There is a lot of information to know about the different housing schemes, eligibility schemes and loan application. Here’s the basic information to know!

Types of Housing Schemes

There are numerous housing schemes, suited for couples with different household income and different preferences. The most common is HDB flat, which comes in various ‘rooms’, from the smallest 2-room flexi of about 36 square metres to the largest executive flat of 130 square metres. There is also a 3Gen flat of about 115 square metres, designed to meet the needs of multi-generation families. HDB flats can be bought new, through the Build-to-Order (BTO) or Sale of Balance Flats (SBF) launches, or from resale.

The second type of housing is the Design, Build and Sell Scheme (DBSS), which are flats with better finishes and designs that are bought directly from the developer. The eligibility criteria is similar to that for HDB flats.

The third type of housing is executive condominium (EC) which is comparable to private condominiums, bought directly from the developer. EC owners can put up their unit for sale in the open market after the minimum occupation period.

Eligibility

There are various eligibility schemes, broadly categorised by the type of family nucleus. For a young couple, the more common scheme will be:

Public Scheme – Family nucleus formed with spouse and children (if any)

Fiancé/Fiancée Scheme – Family nucleus formed with spouse-to-be. The marriage certificate has to be shown before taking possession of the flat if you have also taken a CPF housing grant.

Other eligibility criteria are:

Citizenship – Either both applicants are Singapore citizens or one is a citizen and the other a Singapore permanent resident

Age – At least 21 year old

Income ceiling – For HDB and DBSS, the monthly household income must not exceed $12,000, or $18,000 if applying with your extended family. For EC, the monthly household income must not exceed the $14,000.

Property ownership – To purchase a HDB flat, DBSS or new EC, one must not own other property overseas or locally, or have disposed of any within the last 30 months. You must also not have bought a new HDB/ DBSS flat or EC, or received a CPF Housing Grant before; or, you have only bought one of these properties, or received one CPF Housing Grant thus far.

Privileges

For young couples who are buying their flat for the first time, there are several privileges to ensure a higher chance for young couples to secure their first flat. For instance for HDB flat, there will be more ballot chances and additional ballot chances for unsuccessful attempts. For DBSS, 95% of flat supply is set aside for first-timer families during the initial launch period. Similarly for EC, 70% of flat supply is set aside for first-timer families during the initial launch period.

Parenthood Priority Scheme

There are additional privileges for those who are married and expecting a Singapore citizen child or have a child below 16 years old, and applying for HDB flats for the first-time. For instance, up to 30% of BTO units and 50% of SBF units are allocated to applicants under this scheme.

CPF Housing Grant

There are also housing grants (Additional CPF Housing Grant (AHG) and Special CPF Housing Grant (SHG)) to help defray the cost of purchasing a HDB flat, of up to $80,000 calculated based on your income. The CPF housing grants will be fully credited into the CPF ordinary accounts of eligible Singapore citizens with no cash disbursement.

Loan Application

HDB Loan

HDB offers loan at concessionary rates, currently at 2.6% based on 0.1% above the current CPF rate (2.5%). HDB loans allow for early repayment without penalty. To be eligible for a HDB loan, the young couple has to meet the following criteria:

a. At least one buyer is a Singapore citizen
b. Have not previously taken 2 or more housing loans from HDB, and have taken a housing loan from HDB and the last property owned is not a private residential property
c. Income Ceiling should not exceed $12,000 for families or $18,000 for extended families
d. Must not own or have disposed of any private residential property in the 30 months before the date of application

Bank Loan

If you are not eligible for a HDB loan, you will have to consider taking a bank loan which is typically at rates that fluctuate depending on interbank rate. If you are buying a DBSS flat and your average gross monthly income is more than $12,000 or $18,000 for extended families, or if you are buying a EC, you will not be eligible for HDB loan.

It is important to consider carefully before making a home purchase and the factors are often beyond funding – for instance, getting a flat near to parents who can help with the children, and living near them to care for the elderly parents more easily as they age. For those who think further ahead, you may consider living near your choice of primary school. Yet some couples may want a flat soon and opt for resale, which can be larger than new HDB flat while others may desire to be the first occupants of their flat. A home purchase is usually the first major decision for a young married couple – take the time to discuss and talk things through.

Written by Mei