New grant, second HDB loan, two-room flexi flats possible for Fresh Start Housing Scheme

A new scheme to help public rental households own their own home again could allow second-timers to receive another Housing Board concessionary loan.
A new scheme to help public rental households own their own home again could allow second-timers to receive another Housing Board concessionary loan.PHOTO: ST FILE

SINGAPORE - A new scheme to help public rental households own a home again could allow these second-timers to receive another Housing Board (HDB) concessionary loan. It could also give them the option of buying two-room flexi flats on shorter leases, which is now possible only for elderly buyers.

And while this Fresh Start Housing Scheme will include a new grant, this might be disbursed gradually over time, subject to conditions, as a way of motivating the new homeowners.

National Development Minister Lawrence Wong shared these latest ideas for the upcoming Fresh Start Housing Scheme in a blog post on Tuesday (Dec 15). The MND and the HDB are now gathering views on the scheme through public dialogues.

One group consulted comprised former flat owners who are now living in public rental flats. Said Mr Wong: "Most said they wanted to own a flat again for their children to grow up in, but were unable to get mortgage loans. Some also said it was difficult to pay the resale levy in cash."

The Fresh Start Housing Scheme will help them with a Fresh Start Housing Grant, to reduce the amount they need to pay for their new flat, he said.

"Second, we can consider providing them with another HDB concessionary loan," he added.

Third, the HDB will explore offering two-room flexi flats on shorter leases, which cost less, under the Fresh Start scheme. Families might have to stay in the flat for a longer time - known as the minimum occupation period - before they are allowed to resell it.

"While I understand that some larger families may prefer to buy a bigger flat, it would be more prudent to secure a flat first, and then move on to a bigger unit when they are able to do so," said Mr Wong.

Although two-room flexi flats are similar in size to public rental flats, the "big difference" is that the former will be a flat that they pay for and can eventually call their own, he added.

The public consultation also reached out to former public rental tenants who became homeowners. Many of them had support from friends, family, government agencies and community organisations, and "had a very strong sense of self-motivation", noted Mr Wong.

"They all agreed on the importance of securing regular employment, working hard, and putting their children through school, so that the problems do not continue with the next generation."

Meanwhile, social workers said that a critical factor was for such families to believe in their own ability to succeed, said Mr Wong.

One suggestion from social workers was to disburse the housing grant not as a single lump sum, but in a few tranches over time, subject to conditions which must be met. Mr Wong said this was a good idea which the HDB will consider incorporating into the scheme.

"Given the complex issues families face, some may need more guidance and support before they can commit to homeownership. So the number of Fresh Start families may not be large to begin with. But it's better to start the scheme on a sound footing, and then see how it can be expanded over time to benefit more families," he concluded.

The public can send their suggestions for the scheme to feedback@mnd.gov.sg.