HDB has updated the income assessment period for flat buyers and introduced a new HFE letter, outlining changes to eligibility for housing subsidies. The new disbursement guideline applies to households where the core nucleus comprises either a Singaporean citizen and a PR, or two Singaporean citizens, wherein housing grants will now be disbursed equally to both. The move allows for a more consistent and clearer assessment of applicants’ income levels, which could benefit commission-based workers, whose income fluctuates monthly. Lee Sze Teck, senior director of research at Huttons Asia, anticipates that the change in disbursement guidelines could create some uncertainty in the HDB resale market, due to the new ruling in relation to grant disbursement.

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HDB has announced changes to its eligibility assessment for housing subsidies, commencing on May 9. This has been coupled with the introduction of a new HDB flat eligibility (HFE) letter to replace the existing HDB loan eligibility letter. The HFE letter informs flat buyers of their eligibility for a new or resale flat purchase and the amount of HDB housing loan and CPF housing grants they can obtain.

The new disbursement guideline applies to households where the core nucleus consists of either a Singaporean citizen and a PR, or two Singaporean citizens. In these cases, the housing grant will now be split equally between the applicants and occupiers, compared to before, when the full grant amount was disbursed only to the Singaporean citizen.

To ensure a more consistent evaluation of applicants’ income levels, the assessment period for flat buyers has been extended from three to 12 months. Lee Sze Teck, senior director of research at Huttons Asia, predicts that this increased grant regulation could dampen the enthusiasm created by the doubling of housing grants in February 2023. Additionally, it may reduce the amount of grant that can be used to offset the purchase price of a resale flat, due to the split of grant disbursement between the applicant and the essential occupier.

While the new rules may affect the HDB resale market, they could benefit commission-based workers, whose income can fluctuate greatly. This move by HDB of a longer income assessment period will provide a greater opportunity to demonstrate their financial capabilities to obtain the HDB housing loan and CPF housing grants.