Written answer by Ministry of National Development on proposal for Rent-to-Own Housing scheme

Oct 16, 2024

Question No: 6731

Question by: Assoc Prof Jamus Jerome Lim

To ask the Minister for National Development (a) whether HDB has considered a rent-to-own model, notwithstanding the availability of various grant schemes like the Step-Up CPF Housing Grants or Fresh Start Housing Scheme that are designed to help rental tenants progress toward eventual home ownership; and (b) if not, why not.

Answer:

HDB used to have a Rent and Purchase Scheme. Introduced in 1999, the scheme allowed lower-income households to rent a flat from HDB, and then purchase it when their financial situation improved.

After we resumed the building of three-room sold flats in 2004, and two-room sold flats in 2006, as well as introduced substantial CPF housing grants to help low-income working households own their first home, the demand for the Rent and Purchase Scheme dropped significantly. For instance, in 2008, there were only two applications. The scheme was therefore suspended in 2009.

While we have no plans to revive the scheme at this point, supporting public rental households to achieve home ownership remains a priority, and we have strengthened our measures over the years.

HDB prices new flats with significant market discounts, and we offer substantial housing grants to lower-income families. First-timers can receive up to $120,000 of the Enhanced CPF Housing Grant, while second-timers can tap on the $15,000 Step-Up CPF Housing Grant. Second-timer families with children can also tap on the Fresh Start Housing Scheme, to buy a 2- or 3-room flat on a shorter lease, with a $50,000 grant.

Home ownership is a long-term financial commitment, and the process of buying a home may be daunting for some. This is why HDB has a dedicated team of officers in the Home ownership Support Team, or HST, that provides personalised guidance to public rental households on their home ownership options. For those who are ready to work towards buying a flat, HST will guide them throughout their homebuying journey, from budgeting to key collection.

For the rest, HDB works closely with other agencies and community partners to support them holistically towards financial stability, through employment support and social assistance.