SINGAPORE - An additional 800 interim rental Housing Board flats will be set aside for families waiting for their Build-To-Order (BTO) flats to be completed, including those facing construction delays, but there will be stricter eligibility criteria for those wishing to apply for these units.

To apply for a unit under the Parenthood Provisional Housing Scheme (PPHS) from Wednesday (Aug 4) onwards, the household combined monthly income cannot be more than $7,000, said the HDB on Tuesday.

The income reflected at the point of sale application for the BTO flat will be the basis for consideration, said HDB. Households whose incomes have fallen to $7,000 and below since their sales application may contact HDB directly.

The household income ceiling is to ensure that the flats, which are highly subsidised, are allocated to those who are less able to afford renting a flat on the open market, said HDB.

The PPHS provides interim housing to households awaiting the completion of their BTO flats, with units allocated by ballot.

Rents range from $400 for a two-room flat in Marsiling, $600 for a three-roomer in Hougang and $1,500 for a four-room unit in Tiong Bahru.

Priority will be given to married couples with children aged 18 and under in the selection of a PPHS flat ahead of other eligible applicants. This includes expectant parents.

A one-year wait-out period will apply to PPHS applicants who do not select a flat after being invited twice to do so.

They will have to wait one year from the date of the second non-selection before they can apply for a PPHS flat again.

This also applies to those who did not proceed with payment after selecting a flat.

The reason is because about half of the applicants who were invited to select a PPHS flat eventually did not do so, despite a rising number of applications since last year.

"This could be due to a variety of reasons, such as locational preferences. However, this also suggests that not all applicants may be in urgent need of temporary housing, and some may be able to continue with their current housing arrangements for some time," said HDB.

The one-year wait-out period will allow applicants with more urgent housing needs to secure a flat more quickly, added HDB.

PPHS exercises will now be held once every two months, instead of monthly, to consolidate the flats to offer applicants a larger pool of units to choose from.

"This will improve the applicants' chances of securing a flat in each selection exercise and reduce the need for repeated applications," said HDB.

From the next PPHS exercise in October, applicants will have 14 days to submit their application.

On Tuesday, HDB said that about 200 of the additional 800 PPHS units will be ready this year and progressively released for application from the fourth quarter.

These additional flats include vacated flats at sites currently undergoing the Selective En bloc Redevelopment Scheme (SERS), flats which are unsold, and possibly vacant staff apartments at various polytechnics that are available temporarily.

There are around 840 existing units under the scheme.

Demand for the interim flats also doubled last year as more families were affected by construction delays to BTO units due to the Covid-19 pandemic.

The HDB had received 2,350 applications under the PPHS compared with 1,370 in 2019.

The scheme has supported more than 3,000 families since it began in 2013.

The stricter eligibility conditions and allocation process come as HDB said the supply of PPHS flats remains limited, even as HDB increases its stock of such units.

On Tuesday, National Development Minister Desmond Lee said in a Facebook post that demand for PPHS flats has doubled since the start of the pandemic because of BTO construction delays.

He noted that more people are looking for their own space as they work from home, and that competition for open market rental has increased due to the Covid-19 pandemic.

At the same time, the supply of PPHS flats has become even tighter, said Mr Lee.

"While PPHS tenants usually stay in their rental flat for about two years or more, the delays in BTO completion mean that these tenants now stay longer in their PPHS flats, thus slowing down the return of the flats to HDB for subsequent tenants," said Mr Lee.

"The shortage of construction workers has also led to delays in sprucing up the flats after they are returned to HDB, and this has increased the time taken for the vacated flats to be rented out to new tenants," he added .

Households waiting for their BTO flats are encouraged by HDB to continue living with their families or consider renting from the open market.

Potential home buyers should also take into account the waiting time of BTO flats before making a purchase and plan ahead for interim housing options, HDB added.

An accountant who wanted to be known as Ms Low, 27, said she was disappointed to hear of the income cap, as her combined household income was slightly above $7,000 when she and her husband applied for a Toa Payoh BTO flat last February.

The couple have a 10-month-old baby. They were hoping to get a PPHS unit, as their BTO flat will be ready only in 2026.

Ms Low is living with her in-laws but cites space constraints as the main reason for wanting to move out. Six adults and one baby are now living in a five-room HDB flat.

With a current combined household income of around $10,000, she said it is possible to rent on the open market but was concerned it would take up a substantial chunk of their take-home pay.

"It's not like I'm being greedy and want to live off subsidised housing when I can afford renting on the open market, but raising a kid doesn't come cheap and paying rental outside makes it difficult to save for rainy days and future BTO renovation," she said.