With standards of living and property prices on the rise, we need a little help here and there to finance big purchases. But since not all of us have millionaire parents who’ll pay for us, we all need some assistance from the government. Besides, got money take, who don’t want right? So if you’ve ever wondered how much you can actually get out of the CPF housing grants (or HDB grants) available, here’s our take:
What are HDB grants?
HDB (or CPF) grants are basically monetary value (no you don’t get to see it in cash) given to lower to middle income families to help make their home purchases more affordable. The grants will be fully credited into an applicant’s CPF Ordinary account after flat booking and be used to offset the purchase price of the flat, hence lowering the mortgage amount required.
Grants are usually inversely related to your income and mortgage loan amount. While a lower income qualifies you for a higher grant amount (eg in AHG and SHG), this lowers the loan amount the bank can confidently lend you. The good news is, grants are credited early in the booking process when you’re buying a building that’s still under development…And bank loans are usually only taken when the project nears it’s completion. So you have a few years to jack up your salary before you’ll need to sign down on your bank loan.
Types of grants
SHG (Special CPF Housing Grant)
Meant for helping lower to middle income families to afford their first HDB home, the SHG is only applicable for new HDB 4-room flats and smaller in non-mature estates. Why? Because if you’re so rich to pick expensive HDBs, maybe you don’t really need any help after all.
Income cap: $8,500
Grant amount: From $5,000 to $40,000
(Enhanced) CPF Housing grant/ Family Grant
Applicable for only resale and EC purchases, it seems HDB has given much thought into making even higher priced homes more affordable for us. Instead of giving out amounts that are proportionate to monthly household incomes, HDB has actually fixed this grant at a flat amount for resale flat buyers! Sadly, grants for ECs are still subjected to a table where grant amounts are proportionate to monthly income.
Income cap: $12,000 (If you’re buying an EC where their eligible buyer income cap is below $14,000 and your monthly household income is $13,000, you can’t get this grant. Sorry!)
$50,000 (for 4-room resale flats or smaller)
$40,000 (for 5-room resale flats or bigger)
$10,000 to 30,000 (for ECs)
AHG (Additional CPF Housing Grant)
As it’s name suggests, this grant serves as an additional source of help for lower income families who really need a subsidised home/space. Whether you’re buying a new 2-room flexi or a resale jumbo flat, the AHG (for first time couples) does not discriminate between size of home, or whether it’s a new or resale flat. Of course, ECs are not included. ‘Cause no one in their right mind would live in an EC if their total monthly income can’t hit $5,000 (unless their parents are, you know, tua lui lang, help them pay off the house lah.)
Income cap: $5,000
Grant amount: From $5,000 to $40,000
PHG (Proximity Housing Grant)
Applicable to only resale flats, the PHG serves as a third layer of support for families purchasing resale flats with/within the same town/within 2km from their parents. Regardless of how much you’re earning and which home you’re buying, so long as it’s a resale flat with/near your parents, you’re eligible to apply for a PHG grant.
Income cap: None
Grant amount: $20,000
So for example…
If you’ve freshly graduated, and your fiancee and you are looking to buy a Build-to-Order (BTO) flat to start a family, you can consider buying a 4-room flat in a non-matured area at the earlier stages of your career. This way, you’ll be eligible for all the grants available for BTOs (AHG and SHG). Your income would also be at it’s lowest at the time you book your home (hence maximising on your grants). Consider the table below:
If you’d applied early in your career at a starting salary of, say, $2,000 each, and assuming you and your fiance have only started work for 7 months, your average monthly household income calculated for the past 12 months would be $2,333. Qualifying you for a total grant amount of $70,000. And you’ll still be able to get a higher amount of loan when your home nears it’s TOP period (you will only need a bank loan when your BTO completes) few years later.
This amount is more than what you would get if you were to apply for your flat when you and your fiance are already 2 years in the workforce, with a salary increment of an average of, say, $550 each. That’s an average monthly household income of $5,100. Which qualifies you for only $35,000 worth of grants. That’s half the amount you would’ve gotten if you’d just chosen your house earlier.
Of course, with waiting time for BTOs shortening to a mere 2 and a half years, you should ensure that at least one of you has a stable job. This example also assumes that your fiance remains unchanged throughout both your working years (haha).
What if there’s only one person earning an income?
If there’s only 1 sole breadwinner in your family, and you’re looking to buy a resale flat urgently because you’re about to have children, consider getting a home near your parents. Aside from getting an extra $20,000 from the PHG to offset your home purchase, living near your parents can be convenient whenever you urgently need help babysitting, taking care of elderly parents, or just plain having family dinners.
Whether you’re taking a 4-room or a jumbo flat, you’re guaranteed a minimum of $40,000 as a base from the Family Grant/ Enhanced CPF Housing grant. You may also receive a third grant (the AHG) of up to $40,000 if your monthly household income is below $5,000.
That amounts to anywhere between $65,000 to $110,000 in grants.
What if my spouse is not a Singapore Citizen/ Permanent Resident but we’re both first time buyers?
The grants above would be halved the original amount it would’ve been for a couple where both parties are Singapore Citizens. Simple right?