Housing for the lower income

It’s all about giving hope for a better future

Over the last two months, I have shared my thoughts about public housing in Singapore – why we actively promote homeownership, why the Housing and Development Board (HDB) has to build different flats for different buyers, and how flats are made affordable. But the path to homeownership is not always easy for some families, especially if they fall on hard times.

Take the case of Mdm P. She was only 35 when she divorced her husband and was awarded custody of her two young children. She was not working and had no income. Her future seemed bleak.

After assessing Mdm P’s case, the HDB helped her with a subsidised rental flat. Seven years on, Mdm P has a good steady job and has moved her family to a 3-room HDB flat in Sengkang. She pays for her housing loan almost entirely out of her CPF contribution. Mdm P is hopeful of the future for her and her family.

This is the heart of the HDB story – hope for a better future for all Singapore families. However, I am sometimes asked: Is homeownership really possible for the lower-income, when they can barely make ends meet? Aren’t they better off just staying in a public rental flat, perhaps for the rest of their lives?


Since its earliest days, the HDB’s main objective has been to give families a home and a stake in the country. Homeownership for the lower-income may not be easy, but it is possible with hard work and some additional help from the Government.

The Additional CPF Housing Grant (AHG) was introduced in 2006, and increased in 2007 and 2009, to help flat buyers with lower incomes to own their first homes (see graphic). As the name suggests, the AHG comes in addition to the existing market subsidy for new flats and the CPF Housing Grant for resale flats. The HDB also builds more affordable 2-room and 3-room flats for lower-income families.

Take the case of a first-timer family earning $1,400 a month and buying a 2-room BTO flat. Besides enjoying the market subsidy on their flat, they can also enjoy a $40,000 AHG and obtain a loan from the HDB, if eligible. Their monthly mortgage payment comes to $230, which is 16 per cent of their household income. Even better, their mortgage payment can be paid fully from their CPF.


Despite the extensive subsidies, there may still be some who find it difficult to own a home. They may be unable to work due to old age or physical disabilities. Or they may face temporary setbacks, like Mdm P. The HDB’s heavily-subsidised public rental flats are the final safety net for these needy families even as social agencies help them to improve their longer-term incomes. The monthly rent for a 1-room flat is as low as $30.

To speed up the allocation of public rental flats to this group, the HDB has been increasing the supply of rental flats since 2007. Eligibility rules for rental flats have been tightened to safeguard them for the truly needy. For example, those who have substantial savings or enjoyed significant proceeds from the sale of their previous HDB flats do not qualify for rental flats.

In line with our philosophy that family should be the first line of support, the elderly are encouraged to stay with their children as far as possible.

Through these measures, the HDB has reduced the waiting time for rental flats from 21 months in 2008 to about nine months today.


Should the HDB provide subsidised rental flats to all who come forward for help? About eight out of 10 appeals for rental flats are from those who have previously owned subsidised HDB flats. Many of them have cashed out on their flats and spent their proceeds, sometimes without any clear plan for their next home.

A few elderly applicants also have children who could help to house them. Recently, a Mdm T appealed for a 1-room flat, claiming that she had a hard time living with her married son. She had cash savings and owned a car. She also received a regular allowance from her children. She told the HDB that her children would hire a maid to look after her in the rental flat.

In such cases, is it wise for the State to take over the responsibility of looking after them, because they could not get along with their family?

If the HDB were to do so, would this not encourage such behaviour? Would this be fair to other homeowners who have made responsible choices? Or taxpayers who have to fund the subsidised rental flats?


The problems faced by lower-income families with housing needs are often multi-faceted, extending beyond housing alone. The HDB tries to tackle the problems upstream with other agencies, while maintaining rental housing as the final safety net.

For families in mortgage arrears, the HDB’s housing counsellors advise them on their accommodation options, including how to right-size to more affordable flats. To prevent families from selling their flats without considering their next home, the HDB recently introduced a seven-day cooling period for homeowners to think through their decisions carefully. Meanwhile, the new Council for Estate Agencies will act against agents who mislead homeowners into selling their flats.


Public housing in Singapore goes beyond providing a roof over the heads of lower-income families. Being able to own a home – a valuable asset – helps families to build hope and improve their lives and those of their children. .

The Government is committed and prepared to help lower-income Singaporeans in this journey to homeownership. But citizens must take responsibility for themselves too. Otherwise, our safety net of public rental housing would collapse under pressure.

We recognise that some families may need to rebuild their lives slowly and the path to homeownership may take longer. Mdm P and others like her have shown us that this journey is still very possible, despite the challenges. We must continue to support hardworking families to build the hope of a better future. This HDB story is ultimately part of our Singapore story.

By Mah Bow Tan, Minister for National Development.

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