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As announced during the , the (EHG) will be enhanced to provide greater support for first-time home buyers looking to buy their first HDB flat. Going forward, the will provide eligible first-time applicants with grants of up to $120,000, with higher amounts allocated to lower-income households. Some observation and additional items to point out. For instance, a low-income family with an average monthly household income of $1,500 will now receive an EHG of $120,000—an increase of $40,000 from the previous $80,000. Households with an average monthly income of $2,500 will receive $105,000, an increase of $35,000 from the previous $70,000. In comparison, a middle-income household with an average monthly income of $7,000 will receive $30,000 in EHG, which is $5,000 more than the previous amount of $25,000. This means a low-income single earning less than $750 per month can receive $60,000 in EHG, which is 50% of the $120,000 grant available to families. to flat applications made during past Build-To-Order (BTO) or Sale of Balance Flats exercises, or for open bookings of flats launched in June 2024 or earlier. This includes the requirement that at least one applicant be in continuous employment for a minimum of 12 months at the time of application. Additionally, the remaining lease of the flat must be long enough to cover the youngest buyer and their spouse/fiancé to the age of 95 to qualify for the full EHG. Otherwise, the grant will be pro-rated. For example, a first-time applicant with an average monthly income of $2,500 who buys a 3-room resale flat within a 4 km radius of their parents’ home will receive $105,000 in EHG, $80,000 in CPF Housing Grant, and $20,000 in Proximity Housing Grant, totalling $205,000 in grants. In our view, the most significant impact of these changes is that it allows/encourages low-income families to own their HDB flat, either bought from the resale market or directly from HDB via a BTO launch. Middle-income households benefit from a more modest increase in the EHG, with increments ranging from $5,000 to $15,000. It’s important to note that the increase in the Enhanced CPF Housing Grant (EHG) does not necessarily mean aspiring HDB owners can afford more expensive flats. This is because the has been reduced from 80% to 75%. As a result, HDB buyers taking a housing loan from HDB can now only borrow up to 75% of the flat’s purchase price or valuation, whichever is lower. This aligns the LTV limit for HDB loans with that of financial institutions, which remains at 75%. For example, a couple earning $7,400 a month who has set aside $20,000 in cash and CPF for their down payment would previously receive $20,000 in EHG and $80,000 in the CPF Housing Grant when purchasing a 2- to 4-room resale flat. In total, they would have $120,000 available for the down payment, allowing them to purchase an HDB resale flat worth up to $600,000 under the old 80% LTV limit. With the revised policy, the same couple would now receive $25,000 in EHG (an increase from $20,000), along with their $20,000 in savings and CPF Housing Grant of $80,000, giving them $125,000 for the down payment. However, due to the reduced LTV limit of 75%, they can now purchase an HDB resale flat worth only up to $500,000. Here’s an infographic courtesy of the Ministry of National Development (MND) showing how singles and couples can now afford HDB flats based on their incomes. According to MND, these measures aim to cool the market in response to strong, broad-based demand for resale flats and to promote prudent borrowing, making housing more affordable for lower- to middle-income first-time homebuyers.