We all love a good rags-to-riches story. In Singapore, social mobility has been a cornerstone of our society’s progress. A significant part of this success can be attributed to our public housing policies, which have empowered many families to own their homes and improve their financial standing.
For lower-income families applying for HDB flats for the first time, there is generous support to help them achieve homeownership. First-timer households can receive up to $120,000 under the Enhanced Housing Grant (EHG) if their gross monthly household income is below $1,500. However, this substantial support is only available to first-time buyers and does not extend to those purchasing an HDB flat for the second time.
But what happens if, due to unforeseen circumstances, you lose your HDB flat and end up renting from HDB instead of owning your home? Can you start over and work your way back to homeownership?
This is where the Fresh Start Housing Scheme comes in. Designed to uplift second-timer households who are living in public rental flats, this scheme provides a pathway to owning a home again. It offers enhanced housing grants and tailored support to help families break the cycle of renting and regain the stability and pride of homeownership.
As announced in the Singapore Budget 2025, there are also first-timer families with children living in public rental flats. These families may also aspire to own their flat, but may have difficulties buying a flat with a full 99-year lease, even with the housing grants available to them as first-timers. Thus, the government will also allow these families to buy shorter-lease subsidised flats through the Fresh Start Housing Scheme.
In this article, we examine one of HDB’s housing schemes, the Fresh Start Housing Scheme, which is meant to uplift second-timer households who are living in public rental flats and assist them to own their own homes. The Fresh Start Housing Scheme will also be eligible for first-timer (FT) families with children staying in public rental flats. As first-timers who have not previously received a housing subsidy, these families will be eligible for the Enhanced CPF Housing Grant (EHG) of up to $120,000.
Read Also: Complete Guide To Renting A HDB Flat Via The Public Rental Scheme In Singapore
What Is A Second-Timer Household?
Second-timer households, in HDB parlance, refer to households who have utilised HDB’s housing subsidies. This can be buying an HDB flat directly from HDB (i.e. a BTO flat), taking the CPF Housing Grant to buy an Executive Condominium (EC) unit, Design, Build and Sell Scheme (DBSS) flat or an HDB resale flat, or receiving Selective En bloc Redevelopment Scheme benefits or HUDC estate privatisation benefits.
Read Also: 4 Things You Need To Know Before Buying And Upgrading To Your Second HDB Flat
What Is The Fresh Start Housing Scheme (Fresh Start)?
Recognising the difficulty and lack of support for second-timer families who are living in public rental flats, Ministry of National Development (MND) introduced the Fresh Start Housing Scheme (Fresh Start) in 2016. Fresh Start aims to help these second-timer households with young children living in public rental flats. These households have previously used HDB housing subsidies, so they are no longer eligible for the Enhanced Housing Grant.
Specifically, Fresh Start allows eligible second-timer households to:
#1 Buy a short-lease 2-room Flexi and 3-room BTO flat.
Fresh Start applicants can buy the more affordable short lease 2-room Flexi BTO flat usually reserved for seniors above 55 years old, instead of the usual 99-year lease. For example, a 99-years lease 2-room Flexi BTO flat costing $100,000 would only cost about $60,000 with a 45-years lease. However, the shorter lease must still cover the youngest owner or spouse-occupier until the age of 95 years old. The lease options range from 45 years to 65 years and you must be at least 35 and below 55 years old to apply. Additionally, there is a Minimum Occupation Period (MOP) of 20 years imposed for flats bought under Fresh Start.
As announced during the Committee of Supply 2022, the Fresh Start scheme has been extended to 3-room flats. This means that applicants, especially those with larger family sizes, have a more spacious housing option. The lease options and 20-year MOP requirements remain the same for applicants who choose the 3-room flat type.
#2 Take up an HDB Concessionary Loan.
Fresh Start applicants can take an HDB Concessionary Loan, subject to credit assessment. This applies even if they won’t be eligible to take the HDB Concessionary Loan under normal circumstances.
#3 Pay a maximum of $30,000 for HDB Resale Levy
As Fresh Start applicants are second-timer HDB applicants, they are also subject to the HDB Resale Levy which is paid upon taking possession of the second flat. Usually, the resale levy ranges from $15,000 to $55,000 depending on the flat type. For Fresh Start applicants, the levy is capped at $30,000 and will be adjusted lower depending on the lease chosen.
#4 Receive the Fresh Start Housing Grant of $75,000
Fresh Start applicants also receive a housing grant of $75,000. This will be an upfront disbursement of $60,000 into their CPF Ordinary Account (OA) before key collection, and another $15,000 to be disbursed into their CPF OA in equal tranches over five years after key collection. This will help eligible families with the down payment required. Do note that for first-time families will not receive this $75,000 as these families are eligible for the EHG of up to $120,000.
#5 Receive priority allocation in HDB sales launches – Build-To-Order (BTO) and Sales Of Balance Flats (SBF)
Fresh Start applicants also get priority in BTO and SBF launches under the Tenants’ Priority Scheme with up to 10% of 2-room Flexi unit allocated for this priority scheme. This allocation is shared with other eligible applicants under the Tenants’ Priority Scheme.
To qualify for Fresh Start, the household must have one child below 19 years old, one applicant or spouse in stable employment for a year, been renting an HDB public rental flat for at least one year and the gross monthly household income cannot exceed $7,000. Please refer to HDB’s website for the specifics.
Is It Worth To Continue Renting Or Buy A 2-Room Short Lease Flexi Flat Under Fresh Start?
Assuming you are eligible to apply for Fresh Start, you are probably paying the highest tier of rent under the Public Rental Scheme which is $205 to $275 a month for a 2-room flat for second-timer households.
Let’s assume you are eligible for Fresh Start and have an income of $1,600. You buy a 2-room BTO with the shortest lease of 45 years at $60,000 under Fresh Start.
| Flat Price | $126,000 (lease of 50 years) |
| Resale Levy | $24,000 (levy cap at $30,000) |
| Housing Grant | $60,000 (first disbursement of Fresh Start Housing Grant) |
| Total Amount Needed To Pay* | $90,000 (excluding $15,000 deferred Fresh Start Housing Grant) |
| Assumed cash and CPF Ordinary Account savings | $40,000 |
| Housing loan needed | $50,000 |
| Monthly Mortgage Payment | $268 (assuming 20-year loan tenure), which can be fully covered by CPF contribution with no cash outlay. |
As we can see, assuming you have sufficient savings and/ or CPF monies, buying a flat under the Fresh Start Housing Scheme may make more sense because you can pay the monthly mortgage with your CPF and thus leave more cash in hand for your daily expenses. Even if you don’t have enough CPF/savings, the Fresh Start Housing Scheme grant is more than sufficient to cover the down payment.
For first-time homeowners, the EHG grant of up to $120,000 provides an even greater subsidy for them to purchase their first flat. In addition, as first-timer families, they do not pay any resale levey.
Read Also: Guide To HDB 2-Room Short-Lease Flexi Flat For Retirees
The post HDB Fresh Start Housing Scheme: Does It Make Financial Sense For People Staying In Public Rental Flats To Buy Their Own 2-Room Flat? appeared first on DollarsAndSense.sg.
