Source : AsiaOne - 6 Feb 2009
Lower income households looking to buy their first home will have more help starting February 6.
The minister for National Development announced in Parliament today the details of the enhanced Additional CPF Housing Grant Scheme.
The AHG is an additional subsidy over and above the regular market subsidy and CPF Housing Grant that new and resale flat buyers enjoy respectively. It offsets the purchase price of a new or resale HDB flat, thereby further reducing the loan a flat buyer needs to take.
The enhancements are:
- Increase in the income ceiling from $4,000 to $5,000. This will increase
the coverage of the AHG from 50% to 60% of resident households. - Increase in maximum grant quantum from $30,000 to $40,000.
- Reduction of the 2-year continuous employment condition to one year.
| Average Monthly Household Income | Current Additional CPF Housing Grant Quanta | Enhanced Additional CPF Housing Grant Quanta |
| $1,500 or less | $30,000 | $40,000 |
| $1,501 - $2,000 | $25,000 | $35,000 |
| $2,001 - $2,500 | $20,000 | $30,000 |
| $2,501 - $3,000 | $15,000 | $25,000 |
| $3,001 - $3,500 | $10,000 | $20,000 |
| $3,501 - $4,000 | $5,000 | $15,000 |
| $4,001 - $4,500 | - | $10,000 |
| $4,501 - $5,000 | - | $ 5,000 |
An additional 2,700 first time homebuyers are expected to benefit from this scheme. For instance, a family with a monthly household income of $1,500 can comfortably own a new 2-room HDB flat priced at $90,0001. With the help of the maximum AHG quantum of $40,000, they only have a monthly mortgage instalment of about $200. This is about 13% of monthly income and can be serviced entirely from monthly CPF contributions.
Middle income families will also benefit from this scheme. a family with a monthly household income of $4,000 will get an AHG of $15,000, an increase of $10,000. They can also get a higher CPF Housing Grant of $40,000 if they stay near their parents. If they buy a resale 4-room flat at about $315,0002, they will only need to use 26% of their monthly income to service their loan. Only a small cash payment of about $121 is needed, with the rest from their monthly CPF contributions.
The grant, similar to the current scheme, will be used to service the capital payment of the flat. The amount will be reinstated to the recipient’s CPF account when the flat is sold.
This can be used to purchase new/DBSS flat, as well as resale flats on or after February 6, 2009.
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