Special CPF Housing Grant enhanced for 1st-timer low income households from July 2012

They can use $20,000 grant from HDB to buy three-room flats now

By Daryl Chin, The Straits Times, 1 Aug 2012

FAMILIES earning $1,500 a month or less can now use their Housing Board grant to buy a bigger flat, following a change in the rules.

Previously, only those purchasing two-room units in non-mature estates were eligible for the $20,000 boost.

But the Special Housing Grant is now being expanded to include families buying three-room flats.

The HDB said the restriction was intended to encourage financial prudence.

However, it decided to relax the criteria because it recognised that some low-income households may prefer a larger space for their children.

The agency said the change would "fulfil their desire to provide a better living environment for their families, so long as it is within their means".

Sociologist Tan Ern Ser of the National University of Singapore said the boost would be beneficial for larger, multi-generational households.

"It could be helpful - from the perspective of social mobility - if it means that school-going children can have a quiet corner in which to concentrate on their studies," he said.

Eligible families will still need to undergo credit assessment if they choose to take out an HDB loan.

Currently, the grant is given to first-timer households earning $2,250 or less.

The amount of money they receive starts from $5,000.

This can be taken together with the Additional Housing Grant, which is up to $40,000.

The HDB said the new rule kicks in with the latest launch of 4,191 Build-To-Order flats yesterday.

They will be in Bukit Merah, Clementi, Geylang, Choa Chu Kang and Punggol.

ERA Realty key executive officer Eugene Lim predicts a good take-up for the flats in Punggol, as some of them are over $100,000 cheaper than their resale counterparts.

"If buyers go for the premium units, which are already fitted out, they can also save on renovation costs," he said.

Mr Nicholas Mak, head of research for SLP International, believes many house hunters will go for the fresh flats in older, more developed estates.

These include Telok Blangah Ridgeview, GreenTops@Sims Place and Clementi Gateway.

"The indicative prices are lower than average resale flat prices, and these units are a limited supply in a strategic location," he said.

Applicants need to submit their bids by Monday.

The projects have an estimated completion date of 2016.