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Home Loans For First Time Buyers With Low Credit Score – Want to know which HDB flats you can buy as singles in Singapore? Here’s a full list of housing types and grants you can get.
A statutory body of the Ministry of National Development (MND), the Housing and Development Board (HDB) is the housing authority of Singapore responsible for the planning and development of affordable public housing for Singaporeans. Established on 1 February 1960, HDB has built more than a million homes, housing 80% of the country’s population.
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HDB currently offers Singaporeans three 99-year rental options: Build-To-Order (BTO), Design, Build and Sell Scheme (DBSS) and Executive Condominiums (EC) to suit different housing needs and budgets.
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HDB announced a series of new measures in September to help new home owners buy new flats and resell them. The following measures entered into force on September 11, 2019:
The monthly household income ceiling for single first-time HDB flat buyers aged 35 and above will be raised from $6,000 to $7,000. Eligible singles can choose a new 2 bedroom flexible flat or a resale flat (up to 5 bedrooms) on the open market with Singles Housing Grant.
That’s good news if you’re currently single and your next milestone is getting your own HDB flat. You can finally avoid the harsh questions of your parents. Or maybe you’re climbing the second rung on the #adultingladder.
HDB will also increase the monthly household income ceiling for families buying new or reselling HDB flats for the first time from $12,000 to $14,000.
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The EHG will replace two previous schemes, the Additional Housing Grant and the Special Housing Grant. The amount of the EHG grant will be linked to your income bracket. The less you earn, the more help you get. Under the Singapore Singles Scheme, EHG will provide up to $40,000 for first-time singles buying a new flat or reselling a flat under the Singapore Singles Scheme (the household income limit will be increased to $4,500) and up to $80,000 for first-time families live time or singles buying a new or/reselling home together (qualified household income limit increased to $9,000).
To be eligible for EHG, applicants or their partners must have worked continuously for at least 12 months, as well as with other HDB schemes, including the Special Housing Grant.
They must also buy a flat to call their home at the age of 95 (based on HDB’s maximum tenancy of 99 years). Those whose apartments do not meet these conditions will be granted a subsidy based on the remaining amount of rent on the apartment that can cover up to that age.
First of all, you must be a Singapore citizen, at least 35 years old, to apply as a single or divorced person. The only exception is if you are an orphan and have no siblings; You can apply for your own apartment after you turn 21 under the orphan program.
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Singles aged 35 and above who are not related can also jointly apply for an HDB flat, up to 4 people can co-own in this way under the singles joint scheme.
Other eligibility requirements are the Ethnic Integration Policy (EIP) and the Singapore Permanent Resident Quota (SPR) (used to encourage and maintain social cohesion). However, this is more likely to affect the location of your residence rather than being a barrier to meeting the application requirements.
As an individual buyer, you have 2 choices when it comes to HDB flats; The table below provides a brief overview of the pros and cons of both options.
The biggest advantage of getting a BTO apartment is financial. BTO is much cheaper than the resale market. However, singles are restricted to 2-bedroom flexible units* on non-mature properties only, even if several people are sharing together.
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With 1 bedroom and 1 living room, the total area of the units varies from 35 m2 to 49 m2.
Of course, a two-bedroom apartment is small, but if you apply for it under the BTO scheme, you will get a new apartment that you can renovate according to your needs. For example, the current 36 square meter model has sliding partitions instead of solid walls, which allows for the creation of an open-concept apartment.
In the November 2020 HDB BTO exercise, there were 2,564 applicants for 2-room Fleki units (2.6 applicants per unit) and 23,691 applicants for 3-room and more units (4.9 applicants per unit).
But be careful with the waiting time. Even if you are lucky enough to be successful in the HDB BTO ballot, you will still have to wait around 3 to 4 years for your flat to be built before you can move in.
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Pro tip: When referring to HDB flats, always subtract 1 from the name to determine how many bedrooms you will get. So, a three-room apartment means 2 bedrooms + 1 living room, 4 bedrooms means 3 bedrooms + 1 living room, and so on.
If you don’t like voting (and waiting) for a 2 bedroom HDB BTO flecky unit, you can try looking for a suitable flat in the resale market. Singles, either individually or together, can buy any type of HDB resale they want, as long as they can afford it.
The main disadvantage of buying a flat for resale is the cost. Right now, and in about 30 years, the smallest resale HDB you’re likely to buy will be a 3-bedroom unit. (HDB flats have a minimum occupancy period of 5 years, and as the current supply has yet to meet demand, you are unlikely to find a 2-bedroom flat on the resale market anytime soon.)
HDB flat prices continue to fall thanks to the government’s cooling measures. This has helped make resale homes affordable to most individual buyers. However, you will still need to pay around US$238,000-407,000 for a 3-bedroom HDB resale unit.
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If your resale home has less than a 60-year lease, you will be limited in how much time you can spend paying off the mortgage. The latest update in May 2019 states that the amount you can pay for your home is prorated based on whether the remaining rent can cover the youngest home owner until age 95.
This means that when your mortgage comes due, you’ll have to pay more cash. Consider this when planning your finances.
The update at the end of May 2019 also states that the funds can only be used to finance your property if the remaining lease can cover the youngest buyer up to the age of 95.
This means that the lease should ideally cover the youngest buyers up to the age of 95. The buyer can then use it to pay the property up to the appraisal limit if the conditions are met. Otherwise, usage will be prorated. It cannot be used if the remaining term of the lease is less than 20 years
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Once you find and buy your HDB resale flat, you will most likely need/want to do some major renovations. Anecdotal evidence suggests you should budget $30,000 for a 3-bedroom, $40,000 for a 4-bedroom, and $50,000 for renovations.
As an individual homeowner, you will undoubtedly find more expensive resale homes. However, resale units offer you one financial advantage that 2 bedroom BTOs do not.
If you don’t need the extra room, you can rent it out to earn extra income. It’s true that sharing a home with renters has its pros and cons, but don’t underestimate the financial opportunities that renting can open up.
Having your own place in Singapore is a big decision in terms of the amount of funding required. Whether you are getting a flat at 35 through a single scheme or a combination scheme, it is important to check the eligibility criteria for each scheme.
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By learning about the grants and loans you can apply for, you can find ways to lower the cost of buying your own home so you can fully enjoy the freedom of home ownership. Since 2003, Dan Green has been a leading mortgage lender and respected authority in the industry. Her unwavering commitment to first home buyers and buyer education has made her a trusted voice among her peers, colleagues and the media. And it was founded to make the American dream of home ownership a reality for everyone who wants it. Read more about Dan Green.
There are several options for home buyers to purchase their first home with a low down payment mortgage. Buyers can qualify for a mortgage with a 3 percent down payment, and low-down mortgages are available for $0. First-time home buyers save an average of 7 percent on their down payment, but even that is optional. You do not have to […]
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