HOUSING & DEVELOPMENT BOARD

Dear KEO,

Measures to Promote Sustainable Conditions in the Property Market

As you may be aware, HDB, MND and MAS announced on 29 Sep 2022 a package of measures to promote sustainable conditions in the property market by ensuring prudent borrowing and moderating demand.

The measures are:

Higher Medium-Term Interest Rate Floor to Compute Total Debt Servicing Ratio (TDSR) and Mortgage Servicing Ratio (MSR)
The medium-term interest rate floor used to compute the TDSR and MSR for property loans granted by financial institutions (FIs) has been raised by 0.5%-point.
Introduction of Interest Rate Floor to Compute Eligible Loan Amount
While the HDB concessionary interest rate will remain at 2.6% per annum, HDB will use the higher of the interest rate floor (currently at 3.0% per annum) and the prevailing HDB housing loan interest rate to compute the housing loan amount that a flat buyer may be eligible for. This will apply to HDB Loan Eligibility letter applications received by HDB from 30 Sep 2022.
Lowering of Loan-to-Value (LTV) Limit for HDB Housing Loans
The LTV limit for housing loans granted by HDB is reduced from 85% to 80%, if the remaining lease of the flat can cover the youngest buyer to the age of 95 and above. However, if the remaining lease is unable to do so, the 80% LTV limit will be pro-rated. The revised LTV limit does not apply to the loans granted by FIs, which remains at 75%.
Imposition of Wait-Out Period for Private Residential Property Owners and Ex-owners to buy HDB Resale Flats
Owners and ex-owners of private residential properties locally or overseas were previously allowed to buy an HDB resale flat on the open market but were required to dispose of their properties within six months of the resale flat purchase. They are now required to wait out a period of 15 months after the disposal of their properties before they are eligible to buy a resale flat without a CPF housing grant. The wait-out period if they are first-timers and wish to apply for the CPF Housing Grant and Enhanced CPF Housing Grant remains at 30 months.
The 15-month wait-out period will not apply to seniors (and their spouses) aged 55 and above (at the point of resale flat application) who are moving from their private housing to a 4-room or smaller resale flat.

The lower LTV limit and 15-month wait-out period for owners and ex-owners of private residential properties will apply to complete resale applications received by HDB from 30 Sep 2022 onwards. A resale application is considered complete when HDB receives both the seller’s and buyer’s portions of the application. You may refer to the press release for more details.

The Government remains committed to keep public housing inclusive, affordable, and accessible to Singaporeans. We will continue to monitor the property market and adjust our policies to ensure that they remain relevant.

Please assist to disseminate the information to your salespersons. Salespersons are advised to guide their clients accordingly and help their clients to make informed decisions in flat purchases. Thank you.

Yours sincerely

Jamie Ng Pei Lun
Deputy Director (Resale Planning)
Estate Administration & Property Group
Housing & Development Board