One of the perks of applying for a HDB flat at a younger age is that your income is likely to be lower, giving you a higher chance of being eligible for HDB grants. Time is also on your side as you can afford to wait a few years to collect the keys to your HDB flat.
Eligibility Criteria To Apply For HDB Grants
For first-timer couples applying for HDB flats, one of the applicants has to be continuously employed for 12 months prior to the date of their flat application, in order to be eligible for HDB grants. They also have to stay employed at the time of their flat application.
This eligibility criteria is strictly imposed for HDB grants such as the Additional CPF Housing Grant (AHG) and the Special CPF Housing Grant (SHG).
The amount received under AHG and/or SHG depends on the average gross monthly household income for the 12 months prior to the flat application. Larger grant amounts are granted to couples with lower household incomes as shown in the table below for first-time applicants:
The problem arises when young couples want to apply for a HDB flat and want to qualify for HDB grants, but have not been employed continuously for the past 12 months. This deters them from applying from a flat, as they would not be eligible for the grants at that point of time. This is a problem young couples that are still studying or in NS face.
Deferred Income Assessment
Since the sales exercise in May 2018, HDB allowed young couples that apply for HDB flats to defer their assessment of income for grants and loans.
This separated the date of income assessment from the flat application date, allowing young couples to apply for a flat first, and then have their income assessed only nearer to their key collection appointment (which is about 3 years later for couples that apply for BTO flats).
Hence, the condition of being in continuous employment for 12 months only needs to be fulfilled closer to key collection date. Couples that wish to receive HDB grants could now apply for their flat first, rather than having to delay their application till a year or two later when they start working. This also allows these couples time to build up their finances while the flat is being built.
This deferred assessment of income will apply to couples who are students, National Servicemen (NSFs) or those that have recently graduated or completed their NS.
Eligibility Criteria To Defer Income Assessment:
However, this does not mean for sure that you will get the grants in the future, this just means that the income assessment to determine if you get the grants is done at a later date. You will still need to satisfy the eligibility criteria of the respective grants at the time of assessment.
Situations When You Can Defer Income Assessment
Here are a few probable scenarios where these couples can defer their income assessment.
Scenario 1: Both currently still students
Scenario 2: One applicant in NS (or just completed NS), One applicant still studying (or just completed studies)
Scenario 3: Both just completed studies within the last 12 months
Scenario 4: One applicant still studying, One applicant just completed studies within the last 12 months
For these scenarios, the deferment of income assessment increases the chances that by the time it comes for the couple’s income to be assessed, at least one of the applicants would have started working.
However, the timing of the flat application still matters, as there is still the possibility of the couple not qualifying for grants despite deferring their income assessment. For instance, applicants that applied while still studying could still have just graduated by the time of their key collection, not having worked the full 12 months yet.
Hence, an ideal timing to apply for the flat is to work backwards from the estimated date of delivery of the HDB, ensuring that one of the applicants would have worked at least a year prior to the key collection. It would also be useful to estimate the amount of grants you think you will be able to meet the criteria for.
With couples now being able to defer their income assessment, young couples can now apply for a HDB flat earlier and still be able to qualify for grants a few years down the road. However, one of the key considerations when it comes to applying for a BTO is whether the BTO location is somewhere you are looking to stay in the future.
Applying for a BTO earlier does not necessarily equate to a better deal as there could be more ideal BTO launches in the future. In recent news, HDB announced that new Housing Board projects will be announced 6 months before they go on sale (currently the projects are only made public 3 months before they go on sale). This gives couples more time to consider their options and help them to plan ahead. Couples should also be very certain that this is a step they are ready to take before embarking on the whole application process.
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