Singapore tightens HDB loan rules for lower-income buyers

Singapore’s Ministry of National Development (MND) announced new measures on Tuesday aimed at cooling the resale flat market while providing additional support to lower-to-middle income first-time homebuyers.

The Loan-to-Value (LTV) limit for Housing Development Board (HDB) loans will be reduced from 80 per cent to 75 per cent. This change aligns HDB loan limits with those of financial institutions to promote responsible borrowing and stabilise the resale market.

Second-hand flat prices have soared in recent years, exceeding S$1 million in some cases. Resale public flat prices increased by 4.9 per cent last year and have continued to rise by over four per cent in the first half of 2024.

To mitigate the impact of the lower LTV limit on lower-to-middle income first-time buyers, the government will increase the Enhanced CPF Housing Grant (EHG). This additional financial assistance will help these buyers purchase their homes.

Attribution: Singapore’s Ministry of National Development statement, Bloomberg

Subediting: Y.Yasser