HDB has reviewed its public housing schemes and policies for the lower income group as part of Government’s effort to foster stronger social cohesion. The review has two main objectives: firstly to assist the lower-income households to own their first subsidised HDB flats; and secondly to facilitate 2-room flat lessees to upgrade to 3-room or bigger flats when they can afford to do so.

(a) Sale of 3-Room Buy-Back Flats;

(b) Sale of Flats to Sitting Tenants Scheme;

(c) Rent & Purchase Scheme;

(d) Priority Allocation of Sold Flats to Tenants;

(e) Sale of 4-Room Budget Flats; and

(f) Low-Income Family Incentive Scheme.

HDB has also enhanced the incentives to make it easier for lower-income households to own their first homes. With the SHAP, a lower income household will no longer need to sieve through the many terms and conditions of each home ownership scheme. They can approach the HDB, which will assess and recommend the most suitable approach to meet the home ownership needs of each family.

The two major enhancements under the SHAP are as follows :

(a) Raising of Monthly Household Income Ceiling

HDB will raise the monthly household income ceiling for the 3-Room Buy-Back Scheme and the Rent and Purchase Scheme from $1,500 to $2,000 with effect from 1 Sep 2000. This will enable more lower-income households to buy 3-room flats from HDB.

Correspondingly, the monthly household income ceiling for the Low-Income Family Incentive Scheme, which is an easy mortgage loan scheme for the purchase of 4-room budget or smaller HDB flats, will be raised from $1,500 to $2,000. The change will apply to mortgage loan applications received from 1 Sep 2000. Eligible applicants who have submitted their loan applications may also request HDB to consider their loan applications under this scheme.

(b) Raising of Maximum Tenancy Discount

To make flat purchase more affordable to rental tenants, HDB will increase the maximum tenancy discount under the Rent and Purchase Scheme and the Sales of Flats to Sitting Tenants Scheme from $10,000 to $15,000 per flat. The enhanced benefit will apply to all applications to purchase rental flats under these two schemes which are received from 1 Sep 2000.

The detailed benefits under the SHAP are appended at Annex A.

HDB also relocates 1- to 3-room rental tenants in older HDB blocks when it redevelops older HDB estates. The affected tenants are given relocation benefits. To enable more relocation tenants to buy HDB flats and become home owners, HDB will make the following enhancements to its package of relocation benefits:

(a) HDB will introduce a new tenancy discount of 3% per year of tenancy subject to a maximum of 30% or $15,000, whichever is lower when relocation tenants who are first-timers buy their HDB flats.

(b) HDB will allow tenants who are staying alone to include off-site parents and single children as co-lessees to form a family nucleus to buy an HDB flat. For tenants with proper family nucleus, HDB will allow them to include off-site relatives, e.g. grandchildren, nephews and nieces, as co-lessees to enhance their financial ability to purchase HDB flats.

3. HDB will allow elderly tenants who meet the conditions of the Studio Apartment Scheme to buy HDB Studio Apartments which may better meet their housing needs.

The details of the enhanced relocation package are appended at Annex B. The revised relocation benefits will apply to all new relocation sites as well as the list of sites at Annex C where relocation is in progress.

Some lower income families have purchased subsidised 2-room HDB flats as their first flats. Over time, some of them need to upgrade to bigger HDB flats as their families grow. To meet their housing needs, HDB will implement the following measures to facilitate upgrading by 2-room flat lessees who have enjoyed one housing subsidy :

 (a) Upgrading to 3-Room Flats

HDB will open the 3-room Buy-Back Scheme and the Rent & Purchase Scheme, which used to be applicable only to first-timer households, to these 2-room lessees from 1 Sep 2000. They will be able to buy 3-room flats from HDB as their second subsidized flats provided their monthly household income is $2,000 or less.

(b) Ease of upgrading

HDB will make the following refinements to its housing policies on upgrading to make it faster and more affordable for these 2-roomers. It will:

(i) Reduce the resale levy for these 2-room flats from 15% to 10%;

(ii) Shorten the time-bar from 10 years to 5 years for these 2-roomers who wish to upgrade to another subsidized HDB flat; and

(iii) Peg the waiting time for these 2-roomers at one year above the waiting time for first-timers, or the waiting time for other second-time households, whichever is shorter.

The changes will apply to applicants on the Registration of Flat System who have not taken possession of their flats as well as new flat applications received from today.

In addition to the above initiatives, HDB has decided to allow certain elderly lessees to sublet their whole HDB flats. This will enable them to generate some income for their retirement needs and at the same time, encourage them to stay with their relatives or children. Elderly lessees may apply to HDB to sublet their whole flats if they meet the following minimum eligibility conditions:

(a) The flat in question is a 3-room or smaller HDB flat;

2. The lessee has occupied the flat for at least 25 years;
3. The lessee is 65 years old or above at the point of application; and
4. The lessee has no outstanding mortgage loan with HDB.

HDB will assess the merits of each case and grant approval on a case-by-case basis.