Posts Tagged ‘loan’

MND announces measures

Monday, August 30th, 2010

1. Seller’s Stamp Duty (SSD) is now applicable to any seller who sell their property within the 1st 3 years. (HDB sales are not affected due to MOP of 3 or 5 years).

2. SSD is calculated as:
– 1% for first $180,000
– 2% for next $180,000
– 3% for balance.

3. If property sold within:
– 1st year = Full SSD
– 2nd year = 2/3 SSD
– 3rd year = 1/3 SSD

4. If you have an outstanding housing loan and wish to buy a second property, a 30% downpayment is now needed (at least 10% cash, with balance payable with CPF). Those with no outstanding housing loan, 20% downpayment remains.

THE Ministry of National Development (MND) announced on Monday several measures that would maintain a ‘stable and sustainable’ property market, that will take place with immediate effect.

In a statement issued on Monday morning, MND said it would increase the holding period for the imposition of Seller’s Stamp Duty (SSD) on residential properties sold from one year to three years.

The SSD levied will vary according to the term of occupancy. If the property is sold in the first year of purchase, the full SSD will be levied – one per cent for the first $180,000 of the consideration, two per cent for the next $180,000, and three per cent for the balance. Two-thirds of the SSD will be levied for properties sold in the second year of occupancy and one-third for properties sold in the third year of occupancy.

The extended SSD will not affect HDB lessees as the required Minimum Occupation Period for HDB flats is at least 3 years.

For property buyers with outstanding housing loans, the Minimum Cash Payment has been increased from five per cent to ten per cent of the valuation limit. This measure is applied only to buyers of private residential properties, Executive Condominiums, HUDC flats and HDB flats (including those under the Design, Build and Sell Scheme) who are taking housing loans from MAS-regulated financial institutions who already have one or more outstanding housing loans.

For this group, the Loan-to-Value (LTV) limit has been lowered from 80 per cent to 70 per cent. Borrowers who do not have any outstanding housing loans will continue to have an LTV cap of 80 per cent. Loans granted by HDB for HDB flats (including DBSS flats) will still have an LTV cap of 90 per cent.

HDB loans are offered to eligible first-time flat buyers and second-timers who are right-sizing their flats to meet their housing needs. They are required to utilise all of their CPF Ordinary Account balance before HDB loans will be granted.

In their statement, the MND said lowering the LTV limit would ‘send a clear signal’ to financial institutions to maintain credit standards, and also encourage greater financial prudence.

(via ST Online)

3 changes to HDB Policies

Sunday, April 4th, 2010

Change #1

Minimum Occupation Period (MOP) has been revised. For all who buy a resale flat from 5 March 2010, the new MOP is now 3 years (formerly 1 or 2.5years), regardless of loan taken.

MOP of 5 years remains for owners of new flats, or those taking up HDB grant.

Flat owners who own their flats prior to 5 March 2010 are NOT affected by the changes.

Reinforcing Owner-Occupation Among HDB Flat Owners
Date issued : 05 Mar 2010

The Minister for National Development, Mr Mah Bow Tan, announced in Parliament today that HDB will be raising the Minimum Occupation Period (MOP) for the resale of non-subsidised HDB flats from 1 and 2.5 years to 3 years. The objective is to reinforce owner-occupation.

HDB flats are primarily meant to provide owners with a roof over their heads. They are not meant for speculation or short-term profit. Hence, lessees are required to stay in their flat for a minimum period before they may sell their flat in the open market. Currently, lessees of subsidized HDB flats, i.e. HDB flats bought directly from HDB, DBSS flats bought from private developers or resale flats bought with CPF housing grant, are subject to an MOP of 5 years. On the other hand, lessees of non-subsidised HDB flats i.e. resale flats bought without CPF Housing Grant, are subject to the following MOP:

a) Those who take an HDB concessionary loan – 2.5 years

b) Those who take a bank loan or do not take a loan – 1 year

To reinforce the principle of owner-occupation, the MOP for resale of non-subsidised flats will be increased to 3 years, regardless of whether the buyer takes an HDB loan, a bank loan or no loan at all. With the extension of MOP, the demand in the resale market will also more accurately reflect the interest from buyers who are buying flats for occupation.

The revised MOP policy will apply to resale transactions where applications are received by HDB from 5 Mar 2010 onwards. Existing lessees of non-subsidised flats will not be affected, i.e. the original MOP of 2.5 or 1 year continues to apply to them. There are also no changes to the MOP for subletting of whole flats.

(via HDB website)


Change #2

In the past, HDB upgraders were not allowed to take out a 2nd HDB concessionary loan. Now, should a HDB owner need to downgrade, they can take up a 2nd HDB loan, with conditions:

– Full CPF proceeds from sale of current flat must pay for downgraded flat.
– Half the cash proceeds will go towards paying for downgraded flat.
– Remaining amount would make up 2nd HDB concessionary loan.
– Should cash proceeds be $25k or less, flat buyers get to keep it all.

Normal HDB loan conditions must be met (ie. household income $8k or less). HDB flat buyers who have disposed of their private property remain ineligible for concessionary loan.

Revisions to HDB Loan Policy to Support Right-sizing and Financial Prudence
Date issued : 05 Mar 2010

Minister for National Development, Mr Mah Bow Tan, announced changes to HDB’s second concessionary loan policy in Parliament today. The changes support flat owners to right-size, as well as ensure that buyers exercise financial prudence.

Lifting of Upgrading Condition

Currently, only households that are upgrading to a bigger flat type are eligible to apply for a second concessionary loan from HDB. This may have inadvertently encouraged some to upgrade even though it may not be prudent for them to do so.

HDB will remove the condition that a buyer must upgrade to qualify for a second concessionary loan. This means that the second concessionary loan will be made available to all eligible households regardless whether they upgrade, downsize or move to the same flat type. This will benefit families that need to right-size to smaller flats but do not have sufficient proceeds from the sale of their existing flats. However, HDB flat buyers who have disposed of their private properties will remain ineligible for a second concessionary loan.

Right-sizing the Quantum for the Second Concessionary HDB Loan

To further encourage financial prudence, HDB will reduce the quantum of the second concessionary loan by the full CPF proceeds and part of the cash proceeds from the sale of the existing or immediate past HDB flats. Flat buyers can keep the greater of $25,000 or half of the cash proceeds (including the cash deposit received). HDB will take into account the remaining part of the cash proceeds when determining the quantum of the second loan to be granted.

For those who buy the next flat after selling the existing one, they will have to use up to 50% cash proceeds from the sale of the immediate past HDB flat and all of the CPF balance to finance the purchase of the next flat. This will apply regardless of when the previous HDB flat was sold.

For those who buy their next flat before selling the existing one, the proceeds from the sale of their existing flat would not have been realised when they first apply for an HDB loan. To help them buy a flat, HDB will first grant them a bigger loan at commercial interest rates The commercial interest rates are pegged to the 3-month average non-promotional interest rate for HDB flats offered by the 3 local banks. Currently, the rate is 3.82%. after they draw down their CPF balance. After the sale of their existing flat, they will have to redeem this loan with the full CPF refund from sale of the existing flat and part of the cash proceeds as described in paragraph Upon redemption, the loan will be converted to a concessionary rate loan.

The right-sizing of loan quantum will ensure that flat buyers do not take a larger second concessionary loan than necessary, and can help to reduce the likelihood of subsequent mortgage arrears. Please refer to the worked examples Annex A (PDF 16KB)

Implementation Date

The revised second loan policy is implemented with immediate effect as follows:

(via HDB website)


Change #3

To encourage SPR (Singapore Permanent Resident) to take up citizenship (Singapore Citizen) (or to differentiate between a SC-SC household versus SC-SPR household), SC-SPR households will get $10k less grant (where eligible) compared to before. The $10k can be claimed when the SPR takes up citizenship, or when they have a SC child.

In the case of a new flat, SC-SPR households will have to pay a $10k premium.

There have also been a change in Ethnic ratios to prevent new PRs from forming enclaves. Malaysian PRs are not affected by this new ratio.

Policy Changes To Support An Inclusive And Cohesive Home
Date issued : 05 Mar 2010

The Minister for National Development, Mr Mah Bow Tan, announced in Parliament today housing policy changes to encourage Singapore Permanent Residents (SPRs) to take up citizenship, a new quota to promote social integration of SPR households in public housing estates, and a revision to the Ethnic Integration Policy to accommodate Singapore’s changing demographics.


With globalisation, an increasing number of SPRs are joining our community as long-term residents. SPRs contribute economically and socially to building our society, and it is in our country’s interests for them to sink their roots here permanently. Hence we would like to encourage SPRs to take up Singapore citizenship.

Reinforcing the Privileges of Citizenship

HDB facilitates home ownership by providing generous subsidies. Today, SPRs married to Singapore Citizens (SCs) enjoy the same subsidies as Singaporean couples. We would like to encourage the SPR family members in such SC/SPR households to take up citizenship.

To do this and to reinforce the privilege of citizenship, HDB will withhold $10,000 of the housing subsidies enjoyed by SC/SPR households when they buy a flat. If they buy a resale flat, a Design, Build and Sell Scheme (DBSS) flat, or an Executive Condominium (EC), their Housing Grant will be reduced by $10,000. If they buy a new flat, they will have to pay a $10,000 premium on top of HDB’s selling price. The changes are summarised in Table 1.

The withheld subsidy of $10,000 will be restored when an SPR family member in the SC/SPR household takes up citizenship or if the couple has an SC child while still in ownership of that flat. Eligible households can apply to HDB within 6 months of the change in household citizenship status to claim the $10,000 Citizen Top-Up via CPF.


SPRs are long-term residents in Singapore. It is important that they integrate well in our local communities. Social integration is a key policy objective in our public housing system. In line with this, HDB will introduce a new SPR quota for non-Malaysian SPR families buying flats, to facilitate better integration and to prevent enclaves from forming in public housing estates.

How does the SPR quota work?

The SPR quota will be set at 5% and 8% at the neighbourhood and block levels respectively. It will apply in addition to the existing Ethnic Integration Policy (EIP) limits. The SPR quota takes into account the composition of SCs and SPRs in Singapore, and their respective demand for public housing. Malaysian SPRs will not be subject to the SPR quota, in view of their close cultural and historical similarities with Singaporeans.

The SPR Quota caps the proportion of non-Malaysian SPR households in HDB neighbourhoods and blocks. Similar to EIP, any resale resulting in an increase in SPR proportion will not be allowed, if the neighbourhood/block limit is already reached. Under such circumstances, an SC seller or a Malaysian SPR seller would not be able to sell his flat to a non-Malaysian SPR household. However, a non-Malaysian SPR seller would still be able to sell to another non-Malaysian SPR as this would not increase the number of non-Malaysian SPR households.


The EIP was implemented in 1989 to ensure a balanced ethnic mix across HDB estates and to prevent the formation of racial enclaves.

In response to Singapore’s changing demographics, HDB will increase the limits for the Indian/Others ethnic group by two percentage points to 12% at the neighbourhood level and 15% at the block level. The current Indian/Others limits are 10% and 13% for neighbourhood and block respectively. There is no change to the limits for the Chinese and Malay ethnic groups as the current limits are sufficient. The revised ethnic limits are given in Table 2 below:

Implementation Date and Enquiries

The above housing policy changes will be implemented with immediate effect. More details can be found in Annexes A-C (PDF 16KB).

(via HDB Website)