More Help for the Elderly Who are Right-sizing

At MND’s Committee of Supply debate today, Minister for National Development Lawrence Wong announced measures to support the elderly who wish to right-size their home and unlock the value of their existing homes.

The new measures focus on smoothening the right-sizing process for the elderly, from the early application phase to the final completion stage in the purchase of a new flat:

• service and advice for seniors helps the elderly better understand their housing options and make informed decisions.

• Deferred Downpayment Scheme (DDS) allows right-sizing elderly to defer the payment of downpayment until they collect the keys to their new flat.

• Temporary Loan Scheme (TLS) facilitates a seamless transition from the sale of their existing flat to the collection of keys to their new flat.

Easing cash flow with the Deferred Downpayment Scheme

Currently, flat buyers have to make a downpayment of either 10% or 20% of the flat purchase price when they sign the Agreement for Lease at They also have to pay the stamp and legal fees at this stage, which takes place about three to four months after booking their unit. The balance purchase price will be due for payment when the new flat is ready for keys collection, usually a few years later.

The new Deferred Downpayment Scheme (DDS) allows the elderly who are right-sizing their home to defer the downpayment on their new flat until key collection. This will help to ease the cash flow for elderly flat owners whose funds are tied up in their existing and smoothen the right-sizing process.

The DDS will benefit homeowners aged 55 years old and above who are applying for a 2-room Flexi or 3-room flat in a Build-To-Order (BTO) or Sale of Balance Flats (SBF) exercise. The DDS will be extended automatically to all eligible flat buyers.

With the DDS, eligible flat buyers will only need to pay the stamp and legal fees when they sign the Agreement for Lease, without . They will pay the purchase price of the flat when the new flat is ready for key collection. Please refer to Annex A for an example of how an elderly household which is right-sizing can benefit from the DDS.

Seamless completion of flat purchase with the Temporary Loan Scheme

For elderly households who are right-sizing their home, the proceeds from the sale of their existing flat would generally be sufficient to cover the purchase of their new flat. However, they may need help in the form of a temporary loan to bridge their finances, while they are selling their existing flat.

To help these elderly households, HDB will grant a temporary loan to elderly who do not take a housing loan for their new flat[2], under a new Temporary Loan Scheme (TLS). This will ease their cash flow and allow them to transit smoothly from their existing flat to their new flat. The temporary loan will be disbursed after the first resale appointment for their existing flat. The loan amount will be based on what is needed to complete the purchase of their new flat, after taking into account their available CPF savings. The temporary loan will be redeemed using the net proceeds from the sale of their existing flat.

To benefit a wider group of new flat buyers, the TLS will also be extended to non-elderly buyers who do not take a housing loan for their new flat. Please refer to Annex A for examples of how households can benefit from the TLS.

Implementation

The DDS will be implemented from the May 2017 BTO and SBF exercises. The TLS will be applicable to all resale transactions submitted from 8 Mar 2017. For , the public can contact the HDB Sales/Resale Customer Service Line at 1800-866-3066.

service and advice for seniors

Since December 2016, HDB has implemented an express queue for seniors who visit the Sales Office at HDB Hub, to make an or apply for a flat. Elderly customers who are more comfortable conversing in a particular language could also request assistance from HDB’s customer service officers, who will make the necessary arrangements where possible. To help elderly households better understand the various options and make informed decisions, HDB will also continue to offer one-on-one consultation to seniors at both HDB Hub and its Branches island wide.

1 Those who qualify for the Staggered Downpayment Scheme (SDS) are allowed to pay only half the downpayment (i.e. 5% or 10%) when they sign the Agreement for Lease. The remaining amount is payable during the key collection for the new flat.

2 Those who take an HDB housing loan for their new flats are already assisted currently with a bridging facility, where eligible.