HDB will launch 12,000 BTO flats with shorter waiting times from 2025 to 2027, expand eligibility for DIA scheme

The Housing and Development Board (HDB) will increase the supply of flats with a shorter waiting time of less than three years to 12,000 from 2025 to 2027.

HDB will also expand the eligibility criteria for the Deferred Income Assessment (DIA) scheme.

These were announced by Minister of National Development Desmond Lee on Mar. 26, at the National University of Singapore (NUS), ahead of a dialogue session with the university's students.

Flat supply with shorter waiting times to be increased to 12,000 flats

From 2025 to 2027, the government will also increase the supply of flats with shorter waiting times to 12,000 flats.

This is more than what the government has launched over the past five years, combined.

Lee said, "With the large increase in supply, we do want to better support the aspirations of more than just first-timer families."

Benefits of new flat classification

In acknowledging the calls to lower the eligibility age for singles, he also highlighted how the government supports singles who want to purchase a BTO flat and live with or near their parents.

Such support includes the new flat classification, which allows singles to buy two-room flexi flats island-wide, allowing them to stay near their parents in formerly mature estates.

Under the new flat classification system, BTO projects are classified as Standard, Plus and Prime, instead of mature and non-mature.

The support also includes the new Family Care Scheme, which will kick in later in 2025, giving eligible singles priority access when they apply for new flats to live with or near their parents and vice versa.

Beyond the additional subsidies, the New Flat Classification Framework also seeks to limit the lottery effect and be fair to buyers who did not receive additional subsidies, he said.

Tighter restrictions are in place for Plus and Prime flats, such as a longer Minimum Occupation Period (MOP), subsidy recovery, and tighter conditions on renting and resale.

These restrictions reinforce owner-occupation in public housing, reduce the investment value of a BTO flat, and thereby limit speculative gains, or the lottery effect.

Lee said:

"This is what we mean when we say that we will ensure a wide range of affordable housing for Singaporeans with different housing budgets, while doing so in a manner that is fair, and inclusive."

What is the DIA scheme about?

The DIA scheme is currently available to young couples who are both studying or serving National Service (NS), or were doing so recently.

Under this scheme, the downpayment for a Build-To-Order (BTO) flat will be reduced from S$20,000 to S$10,000.

In addition, the Housing Development Board (HDB) defers the income assessment for housing grants and the housing loan until nearer to key collection, when the couple's incomes are more stable.

Lee noted that the scheme has been well-received so far; it has been taken up by many first-timer couple applicants.

However, the minister said he has also received feedback from young Singaporeans about situations where one person has started work after graduation, but the fiancé may still be studying or serving NS.

Currently, such a couple is not eligible for the DIA.

"But because this is a single-income couple, they may not qualify for a large enough housing loan to afford their desired flat, and they may have difficulty paying the initial downpayment," he pointed out.

What does the expansion of the DIA scheme entail?

According to Lee, the DIA scheme will be expanded to cover young couples where only one party is a full-time student or National Serviceman.

Without DIA scheme: Eligible for a three-room flat at most

The minister gave the following example involving a scenario where one party in a couple is working and earning S$3,500 a year while her partner is still studying.

Without the DIA scheme, their eligibility for the loan and grant is assessed at the moment of their HDB Flat Eligibility (HFE) letter application.

Currently, the couple can take an HDB housing loan of about S$200,000, if they wish to service their loan entirely using CPF.

They also qualify for an Enhanced CPF Housing Grant (EHG) of S$90,000, which places a three-room BTO flat in Yishun at S$265,000 within budget.

Their initial downpayment is also reduced from 10 per cent to 5 per cent, at about S$13,000 under the Staggered Downpayment Scheme (SDS).

With DIA scheme: Can look at four-room flats and more

Under the expansion of the DIA scheme however, the couple will now be able to look at a four-room flat as they can put in their BTO application first, while their HDB housing loan and EHG assessment will be deferred for about three years, nearer to key collection.

Lee elaborated:

"At that point, both parties would have started work. With a combined income of say S$7,500, they will qualify for a sufficient loan to buy their dream four or five-room BTO flat.

So take an example, five-room flat in Yishun, S$500,000, as they are taking up DIA, their initial downpayment is also further reduced from 5 per cent to 2.5 per cent, or S$25,000 to S$12,500."

He added:

"The same logic applies for those who think a three-room flat is sufficient for their needs, but perhaps prefer to purchase a flat nearer to town, or amenities, which are usually a bit more expensive."

Such an expansion will benefit not just university graduates but also a range of young couples, including those serving NS after graduating from polytechnics and ITE, the minister pointed out.

Top photo by Mothership