ST EXPLAINS
Will property cooling measures affect August BTO applicants?
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New property cooling measures were introduced on Friday to cool the heated Housing Board resale and private housing markets.
These include a 15-month wait for private home owners who have sold their units before they can buy resale flats, and tightening of the loan-to-value (LTV) limit for HDB loans from 85 per cent to 80 per cent.
Higher floor rates for the total debt servicing ratio and mortgage servicing ratio for property loans granted by private financial institutions and the Housing Board were also introduced to address the issue of overborrowing.
The Sunday Times answers questions about the measures.
Q Will successful applicants in the August and earlier Build-To-Order (BTO) launches be affected by the new measures?
A No, the LTV limit for HDB housing loans will remain at 85 per cent for successful applicants in those launches.
This means buyers will have to pay a down payment of 15 per cent of the flat's purchase price in cash or Central Provident Fund savings.
Such applicants who have not applied for an HDB loan eligibility letter will also not be subject to the new interest rate floor of 3 per cent for computing the HDB concessionary housing loan amount.
The new measures will take effect from the BTO launches in November, which will offer about 9,500 flats in towns such as Bukit Batok, Kallang/Whampoa, Queenstown, Tengah and Yishun.
Q If I have sold my private property before the new cooling measures were announced, does the wait-out period of 15 months apply if I want to buy an HDB flat?
A The wait-out period applies to private home downgraders who submit the complete resale application - both the buyer's and seller's portions - from Sept 30.
The 15-month wait-out period will not apply to seniors and their spouses, both of whom must be aged 55 and above, who move from their private property to a four-room or smaller resale flat.
The authorities said this is a temporary measure taken to moderate demand, and will be reviewed based on overall demand and market changes.
Q What if I have paid my option fee, or exercised my option to purchase (OTP), but did not submit the HDB resale application before Sept 30?
A The 15-month wait-out period will apply.
A buyer pays an option fee of between $1 and $1,000 in cash to the seller to "reserve" the property. The fee serves as part of the purchase price and is non-refundable.
Within the option period of 21 days, the buyer can exercise his OTP, which means he has legally agreed to buy the flat.
The option exercise fee to buy the flat should not exceed $5,000 when the option fee is included.
After the buyer exercises his OTP, both buyer and seller decide when to submit their respective portions of the resale application to the HDB.
The option to purchase form includes a clause stating that if the HDB's approval for the sale and purchase of the flat is not obtained or revoked, and it is not due to the seller's or buyer's default, the seller has to refund the buyer the fees.
The HDB has said that affected resale flat buyers may approach HDB for assistance and the board will assess their situation on a case-by-case basis.
Q I am 55 years old and my spouse is younger. We jointly own a private property. Will the 15-month wait-out period apply to us?
A Yes, the 15-month wait-out period will apply in this case.
Both owners have to be at least 55 for the wait-out period to be waived when moving from a private property to a four-room or smaller resale flat.
If the couple want to move to a five-room or bigger resale flat, such as an executive apartment or maisonette, the 15-month wait-out period applies.
