CAN a Singaporean who earns $850 a month afford to buy a Housing Board flat?
Mr Mohammad Charlie Jasni says yes.
The odd-job labourer earns that amount, and he and his family will be moving into a new two-room HDB flat in Punggol by the end of the year.
He had successfully balloted for the 45sq m build-to-order unit in August 2009.
It cost $99,220, but because he earns less than $5,000 a month, he qualifies for a government housing grant that gives him $40,000 to offset the flat's price.
This means he has $59,220 left to pay, which he will do using his Central Provident Fund (CPF) savings.
He and his wife already have about $40,000 in their CPF accounts, and this will grow as he continues to work.
Based on HDB's calculations, he needs to pay a monthly housing instalment of $83 over 30 years.
'By paying the $83 out of my CPF, it means I have that little more for daily expenses,' said Mr Charlie, 33.
He is currently living with his wife and two children in a two-room rental flat in Beo Crescent. They pay $44 a month for that flat.
They are excited about their upcoming home and are already discussing renovation ideas and shopping for furniture.
'It is good to have a home of our own,' he said.
Mr Charlie's story puts a face to a statistic that has been debated in the last week.
In Parliament last Thursday, Deputy Prime Minister Tharman Shanmugaratnam revealed that 'a family with $1,000 income can now, through our housing subsidies, purchase a small flat'.
He was responding to Workers' Party member Gerald Giam's comments about Singaporeans being unable to afford a flat.
The minister's remarks sparked off much discussion in both cyberspace and coffee shops alike. Some wondered how $1,000 could buy anyone a flat, given that sum was hardly enough to support a family's daily living expenses.
The next day, National Development Minister Khaw Boon Wan explained that Mr Tharman was referring to a new two-room flat.
He added that the subsidised price of such flats was about $100,000 if the applicant was a first-time buyer. He would also be entitled to housing grants of up to $60,000.
The net selling price would thus be $40,000, and the monthly mortgage payment can be fully paid from his CPF contribution, Mr Khaw said.
In response to queries from The Straits Times, the HDB said it was unable to say how many households earning $1,000 a month own two-room flats. But it pointed to how that it has two schemes that target low-income, first-time buyers.
The Additional CPF Housing Grant Scheme (AHG) benefits households whose income is not more than $5,000 a month. The maximum grant quantum is now $40,000, and it benefits 8,000 households every year, said the HDB.
The Special CPF Housing Grant (SHG) is given to first-timer families earning up to $2,250 a month to buy a small flat. Those earning $1,500 or less get a $20,000 grant. SHG is over and above regular housing subsidies and the AHG.
The HDB estimated that about 700 tenants currently renting flats under the Public Rental Scheme can benefit from the SHG if they decide to buy a flat. To date, the scheme has benefited 53 households who have bought two-room flats.
The HDB also gave The Straits Times five recent case studies of households with monthly income of about $1,000 who bought two-room flats. Four managed to buy new flats with the help of both housing grants. The fifth used only AHG as SHG had not been implemented when he bought his flat.
Out of the five families, three were rental tenants who have bought a new flat without taking any loan because they used the housing grant and their own CPF savings. The other two were families currently living with relatives who have bought new flats using both grants and their CPF savings.
In one case, a couple who lived in a rental flat bought a new flat in Bukit Panjang. At the point of applying for a flat, their monthly income was $900.
The flat cost $106,350. They got the maximum total housing grant of $60,000 - $40,000 AHG and $20,000 SHG. This, together with their CPF savings, meant they did not have to take any loan.
In another case, a man and his mother bought a new flat in Sengkang for $117,750. They got $60,000 in grants, and took a 17-year loan with a monthly instalment of $131...
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Martin Koh/ Sherry Tang
Martin Koh/ Sherry Tang