At Meet-the-People sessions, I sometimes meet elderly residents who intend to right-size to a smaller flat but face some cash-flow difficulties in the process.
The sale proceeds for their existing (larger) flat will be enough to pay for the new (smaller) flat, but they need to sell the flat first to raise the funds for the new purchase. For example, they have to make a downpayment for their new flat, which is at least 10% of the purchase price.
HDB told me that, in 2013, 47 elderly cancelled their new flat bookings, because they were unable to raise the downpayment. They must have felt disappointed, having to abort their plans because of a cash-flow problem.
Today’s announcement by HDB will help address this issue.
Henceforth, flat buyers right-sizing to a 2-room or 3-room BTO flat will only need to pay half the downpayment when they sign the Agreement for Lease. They need only pay the other half together with the balance purchase price when they get the keys to their flat.
I am glad that the HDB has made this change.
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