HDB loan limits tightened in new property cooling measure; eligible first-time buyers to get higher grants of up to S$120,000

SINGAPORE: In a move to cool Singapore’s public housing resale market, the maximum loan that home buyers can take from the Housing and Development Board (HDB) will be tightened from Tuesday (Aug 20).
This was announced late on Monday by HDB and the Ministry of National Development (MND) in a joint media release, which also provided details of the increase in the Enhanced CPF Housing Grant. Eligible first-time home buyers can get up to S$120,000 in support.  
To cool the resale market, the loan-to-value (LTV) limit for HDB loans will be lowered from 80 per cent to 75 per cent, reducing the maximum amount that home buyers can borrow from HDB.
“This brings the LTV limit for HDB loans in line with loans granted by financial institutions, which remains at 75 per cent,” MND and HDB said.
This is the fourth set of property cooling measures since December 2021 when the LTV for HDB loans was lowered from 90 per cent to 85 per cent.
It was further cut to 80 per cent in September 2022.
The authorities said first-time home buyers, especially lower-income households, will be less affected by the lower LTV limit as they receive significant housing grants.
These include the Enhanced CPF Housing Grant, which helps first-time flat applicants buy a new or resale flat. Prime Minister Lawrence Wong announced in his National Day Rally speech on Sunday that the grant will be increased to help lower-income families.
Currently, eligible first-timer families can receive up to S$80,000 under the Enhanced CPF Housing Grant.
This will increase by S$40,000 to a maximum of S$120,000.
For eligible first-timer singles, the maximum grant will go up by up to S$20,000 to S$60,000.
The amounts are tiered based on household income, with no restrictions on flat type and location.
Depending on the monthly household income, the increase will range from S$5,000 to S$40,000 for families and from S$2,500 to S$20,000 for singles, with higher increases for lower-income households who require more support.
Since the Enhanced CPF Housing Grant was introduced in September 2019, about 72,300 first-timer households have benefitted from it, amounting to more than S$2 billion.
In the first six months of this year, about S$204 million was disbursed to about 7,000 first-timer households as part of the Enhanced CPF Housing Grant, according to MND and HDB.
Of the 72,300 first-timer households who received the grant so far, four in 10 bought resale flats while the remaining bought a flat from HDB across the various sales modes, such as Build-to-Order (BTO) and Sale of Balance flats, as well as open booking of flats.
The revised grant will apply to first-timer households who:
The government closely monitors the HDB resale market, said the authorities, noting that earlier rounds of cooling measures and the ramped-up BTO flat supply have helped to moderate resale price increases.
HDB resale prices grew by 4.9 per cent in 2023, down significantly from 10.4 per cent in 2022.
However, resale prices in the first half of this year rose by more than 4 per cent, driven by strong, broad-based demand. In addition, MND and HDB noted that there was some “supply tightness” as fewer flats reached their minimum occupation period this year.
Resale flats remain affordable for the vast majority of home buyers, said MND and HDB, adding that eight in 10 first-timer families who collected the keys to their resale flats in 2023 used 25 per cent or less of their monthly household income to service their HDB housing loan.
“This means they can service their monthly loan instalments with their monthly CPF contributions, with little to no cash outlay. HDB flats that are sold at very high prices make up only a very small minority of total resale transactions,” they said.
“The government remains committed to keep public housing affordable and accessible for Singaporeans. We will continue to monitor the property market closely and adjust policies as necessary to foster a stable and sustainable property market.”
The revised grant will apply to eligible first-timer households who:
Apply for a new flat from the October 2024 BTO exercise onwards
Submit a resale flat application on or after Aug 20, 2024
Apply for an HFE letter on or after Aug 20, 2024