HDB loan limit tightened to 75% to cool resale market

Grant amounts increased for lowerand middle-income buyers getting first flat

- Danson Cheong

The maximum loan that home buyers can take from the Housing Board to purchase their flats will be tightened from Aug 20, in a move to cool the HDB resale market.

HDB will also provide more financial support for first-time flat buyers in the lower-to-middle income brackets, by increasing the Enhanced CPF Housing Grant (EHG) to up to $120,000 for families and $60,000 for singles.

Currently, the EHG gives a maximum of $80,000 in grants for families and $40,000 for singles buying their first new or resale flat.

HDB and the Ministry of National Development (MND) announced these changes in a statement late at night on Aug 19, in what will be the fourth round of property cooling measures since December 2021.

The loan-to-value limit for HDB housing loans will be lowered from 80 per cent to 75 per cent. This means that buyers will be allowed to borrow less than before - up to 75 per cent of the flat value compared with 80 per cent before.

This brings the HDB loan limit in line with mortgages granted by financial institutions, which remain unchanged at 75 per cent.

"Given the sustained, strong, broad-based demand for HDB resale flats, these measures will help cool the market and encourage prudent borrowing, thus making housing more affordable for lower-tomiddle income first-time home buyers," said HDB and MND in the statement.