HDB changes income requirements for young couples buying BTO units

[SINGAPORE] The Housing Board will ease how it examines young couples' incomes when they buy a Build-To-Order (BTO) flat, making it easier for individuals who are still studying or have recently begun working to purchase their desired units.

Couples can choose to delay their income assessment for a housing loan until right before they take the keys to their flat starting with the next BTO exercise in July, as long as one partner is a full-time student or a national serviceman. This practically means that couples would be eligible for a larger loan amount because they would have been working for some time by then.

The policy adjustment comes amid growing concerns about housing affordability, particularly for young Singaporeans who face rising costs of living and competitive job markets. By allowing income assessments closer to key collection, the government aims to provide more flexibility for couples who may see significant salary growth in their early careers, ensuring they aren’t locked into smaller flats due to temporary financial constraints.

Desmond Lee, the National Development Minister, made the announcement on March 26 during a public housing engagement event at the National University of Singapore. Mr Lee also stated that the authorities are increasing the supply of BTO flats, with waiting times of less than three years.

From 2025 to 2027, around 12,000 such flats will be launched, which is more than HDB has produced in the previous five years. They will be among the more than 50,000 flats that the government plans to build over that time.

The increased supply of shorter-waiting-time flats is part of a broader strategy to address pent-up demand from the pandemic years, when construction delays pushed waiting times beyond five years for some projects. Analysts say this move could also ease pressure on the resale market, where prices have surged due to limited availability of new flats in recent years.

Mr Lee stated that modifying the deferred income assessment criterion would allow couples to settle down early and purchase a four- or five-room flat if they intend to have children.

To be eligible for deferred income assessment prior to this modification, both parties had to be full-time students or national servicemen, or have finished their studies or national service within the 12 months before applying for a HDB flat eligibility letter. At least one of them must be 30 or younger.

Experts have welcomed the expanded eligibility, noting that it aligns with Singapore’s broader push to support family formation and homeownership among younger demographics. Property analysts point out that the change could particularly benefit couples where one partner is pursuing further education, such as postgraduate studies, while the other enters the workforce—a scenario that was previously excluded under stricter criteria.

“Each young couple’s life journey is different. Regardless of which path you take, if you are looking to settle down early... we hope to support you in achieving your housing aspirations,” Mr Lee told NUS students.Mr Lee used the example of a couple with a monthly household income of $3,500 to demonstrate how the deferred income assessment would assist applicants in purchasing larger flats.

Previously, their budget allowed them to purchase a three-room BTO flat in Yishun. “However, the three-room flat might be small if they plan to have many children,” he said.

Under the extended policy, the couple can apply for a BTO property first, and their HDB housing loan and Enhanced Central Provident Fund Housing Grant evaluation would be deferred for three years, closer to the key collection date.

"By that stage, both parties would have begun working. With a combined income of, say, $7,500, they will be eligible for a loan large enough to purchase a four- or five-room BTO flat," Mr Lee said.

He noted that the initiative will also benefit couples who believe a three-room flat is adequate but prefer to buy a home closer to the city core and services, which is typically more expensive.

The initial down payment required would be 2.5% of the flat price. Mr Lee stated that the scheme's expansion will help a diverse group of young couples, including university, polytechnic, and Institute of Technical Education graduates. Mr Lee also addressed issues regarding BTO apartment availability and wait times during his speech.

The authorities are on course to exceed their initial goal to build 100,000 new units between 2021 and 2025, he said. The typical waiting period for BTO flats has been reduced to less than four years, which is equivalent to pre-pandemic waiting times, he said. Mr Lee also acknowledged calls to lower the minimum age for singles to buy BTO and resale flats, currently set at 35. This is something that the authorities are reviewing, even though they are “not quite ready to do so”, he said.

He noted that singles have been able to apply for two-room flexi flats in all locations since October 2024. From mid-2025, singles will also get priority access when they buy a home near or with their parents under the Family Care Scheme.

Turning to housing affordability, Mr Lee acknowledged the anxiety felt by students after hearing about resale flats selling for more than $1 million. “I want to assure you that there is a wide range of affordable housing for different housing budgets,” he said.

The new flat categorization system, which divides BTO projects into Standard, Plus, and Prime categories based on their proximity to the city center, transportation links, and amenities, is intended to reduce the "lottery effect" of owning flats in prime and central locations, according to Mr Lee.

Plus and Prime flats will have tighter resale terms, such as a 10-year minimum occupation time and subsidy clawback. Mr Lee also mentioned that they have additional subsidies on top of the existing BTO subsidies to keep them affordable for first-time buyers.

Stefanie Gan, a fourth-year business student, stated that with the modified conditions for the deferred income assessment, she would consider applying for a four-room Prime or Plus flat with her partner, who began working full-time a year ago.

At present, a four-room flat in those categories would not be within reach, as they are typically priced above $500,000, the 23-year-old said. “I would like a flat in Bayshore, but I was worried we would not be able to afford it,” she said, adding that she felt confident they could qualify for a larger housing loan after she enters the workforce.