HDB’s deferred income assessment scheme: Applying BTO without a family loan!

So maybe you and your special someone have decided to take that step of applying for a Build To Order (BTO) flat in Singapore together. But there is just one little blip – you both don’t have any accessible income yet! If you’re really set on applying in the next launch, you may think the only way is to get a loan from a relative or close friend. But did you know HDB has another way? Here is all you need to know about HDB’s deferred income assessment scheme!

What is the deferred income assessment scheme?

HDB’s deferred income assessment scheme was set in place to help young couples who are not yet earning regular incomes, and yet still wish to apply for a BTO flat early. You see, a couple’s accessible income determines what the couple can apply for in terms of the HDB housing loan and CPF grants – two very important factors in meeting the cost of a new house! Under the ordinary income assessment scheme, this would mean that couples who are not yet earning regular incomes will probably not be able to apply for new BTO launches, even though they will be earning income by the time the house is ready.

But what if couples only needed to have accessible income closer to the BTO key collection stage, instead of at the BTO application stage? Under the deferred income assessment scheme, young couples can apply for the BTO now, even if they temporarily have little to no accessible income. Then, only after the BTO flat is constructed, they will get their income assessed for a HDB housing loan and CPF grants. If couples apply for a not-yet-completed flat, this can give them a few more years to meet the deadline, and still shorten their waiting period for their first home!


Of course, the scheme doesn’t apply to every Singaporean couple. To apply for a BTO under the deferred income assessment scheme, both partners in the couple must be above 21, and must be in a position that temporarily offers little to no accessible income. So both partners would need to have been full time students or in National Service sometime in the 12 months before applying for the BTO. Couples also need to apply as an engaged or married couple.

How does it work?

Even though you have a longer deadline to make your payments, be careful not to apply for a flat outside your budget. You should request to use the deferred income assessment scheme at flat selection. After selecting a flat under HDB’s deferred income assessment scheme, you’d still need to make the down payment (10% of the flat’s purchase price) about 4 months later when you sign the Lease Agreement, by cash or CPF. There will also be a stamp duty and a few smaller administrative fees that need to be paid at this time.

If you’ve applied for an uncompleted flat, though, you can also pay the down payment under the Staggered Down Payment scheme, in two instalments – half (5% of the flat’s purchase price) at the signing of the Lease Agreement, and the other half at key collection.

Even though the HLE (HDB loan eligibility) letter is normally obtained before the signing of the Lease Agreement, this step takes place much later in the deferred income assessment scheme – about 6 to 9 months before flat completion. This letter is valid for 6 months, and is needed to apply for the HDB loans and grants. So within those 6 months (~3 months before flat completion), the income assessment takes place, and the couple gets their HDB housing loan and CPF grants according to their income at the time of the assessment.

Caution: Should I request the deferred income assessment scheme?

If you’re set on applying for a house with your significant other before you have accessible income, the deferred income assessment scheme could be for you if:

  • You and/or your partner will start earning accessible income before your flat completion (2-4 years after flat selection)
  • You and your partner have decided that applying early is important.

Before you decide to apply for this scheme, though, you should also consider other alternatives for Singapore’s public housing. You see, because the deferred income assessment can happen so far after you and your significant other apply for the flat, this scheme can come with some uncertainty. This is one of the main drawbacks of HDB’s deferred income assessment scheme. For example, if at the point of application, a couple makes an inaccurate assessment of their future finances, they could wind up finding out that they still cannot afford the flat at the deferred income assessment. If this happens, the couple risks losing the flat, the down payment, and the administrative fees that have already been paid. It can be difficult to accurately assess your financial means if you’re unsure about your future earning potential.

Because of this added risk, you and your partner need to be completely sure that this scheme is for you before you decide to request for HDB’s deferred income assessment scheme. For example, if you want to apply early because of the long waiting time, consider waiting a few years until your incomes are stable, and applying for resale flats or sale of balance flats, which may have shorter waiting times.

Check out this article to help you decide if a new or resale flat is better for you, or click here to see the hot resale areas in Singapore and why.

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