178 sign up for HDB lease buyback scheme

Govt may consider making option available to 4 and 5-room flats too

THE Housing Board’s Lease Buyback Scheme (LBS) has attracted interest from some 178 households since applications opened last month, and the government may consider extending it to include four-room and five-room flats later.

Speaking at an LBS outreach session in Ang Mo Kio yesterday, Prime Minister Lee Hsien Loong said that opting to join the LBS plan ‘is an important decision which flat owners should consider very carefully’. ‘Therefore, it is more important to help them understand the scheme so that they can make an informed decision,’ he added.

The scheme, which aims to help the elderly monetise their flats, was first unveiled by Mr Lee at the 2007 National Day Rally.

Under the LBS plan, HDB will buy back the tail-end of a flat lease at market valuation, leaving a 30-year lease for the household.

So, for example, if a flat has a remaining lease of 70 years, HDB buys 40 years of the lease from the flat owner.

It pays market rate for the lease it buys and this money goes to the new CPF Life annuity in the flat owner’s name.

In addition, the government will also provide a $10,000 subsidy for anyone eligible for the scheme who signs up.

Some $5,000 will be paid immediately in cash, while the other $5,000 goes into the CPF Life annuity.

If the LBS lessee dies before the 30-year lease period is over, his family members who are sharing the same flat can opt to live there for the remaining lease period, or return the flat to HDB for a refund.

Also, if there are beneficiaries of his annuity plan, they will be given the full refund of the unused premium from the annuity plan.

Prior to yesterday’s event, HDB has conducted at least five other outreach programmes that ‘managed to reach out to about 81 per cent of the eligible households’.

This scheme is available to about 25,000 low-income households in Singapore, and is currently only for those aged 62 and above and who own two- or three-room HDB flats.

Of these, some 2,800 are in Ang Mo Kio GRC, and another 800 in Yio Chu Kang, said PM Lee yesterday.

He added that some elderly owners of four or five-room flats have requested to join the scheme, saying ‘this is something we can consider later on’.

Source: Business Times, 20 April 2009

200 sign up for HDB’s Lease Buyback Scheme

Proceeds used to pay for annuity from CPF Board

DRAWN by the promise of an income for life, caretaker Adali Sadap, 74, was one of several Ang Mo Kio residents who signed up for the HDB’s Lease Buyback Scheme yesterday.

About 200 elderly Singaporeans in all have taken up the offer since its launch last month, Prime Minister Lee Hsien Loong said at a roadshow pitching the scheme to his constituents.

Those who qualify will sell to the Housing Board (HDB) the tail-end of their lease at market rate, and the proceeds will be used to buy an annuity from the Central Provident Fund Board.

This annuity could give Mr Adali and his wife, who is 69, a total of about $600 a month throughout their life.

‘I consulted my family, and they all feel the scheme is beneficial to us,’ said the father of 11 who bought his three-room flat in 1981 for $21,900.

It is now worth $248,000, he said, adding that he makes about $600 a month as a mosque caretaker.

The rise in value of HDB homes over time was also noted by Mr Lee in his speech at Nanyang Polytechnic to some 1,000 elderly constituents.

He said the Lease Buyback Scheme was possible because of Singapore’s highly successful home ownership programme.

‘Even now, in an economic downturn, everybody not only has a roof over their heads, but a property which has appreciated in value over the years,’ he noted.

Indeed, some owners of larger HDB homes have asked to be included in the scheme, which is only for owners of three-room or smaller flats.

The Government could consider it later, said Mr Lee, adding that for now, it wants to focus on those who need the scheme most.

The HDB estimates that about 25,000 households qualify for the scheme now.

Around 2,800 are in Ang Mo Kio GRC, and another 800 are in neighbouring Yio Chu Kang, said the Prime Minister.

But he advised the families not to rush into the scheme, saying it was but one option of unlocking their flat’s value while keeping a roof over their heads.

‘We are not pushing this scheme on residents,’ he said, explaining that it was part of the national effort to help the elderly enjoy life in their sunset years without a heavy burden on their shoulders.

Other options to consider include selling or renting their flat and living with their children or renting out a room.

A three-room flat could rent for $1,500 a month, even now, while a room could yield $500 to $600 a month: ‘Not bad,’ noted Mr Lee.

He urged residents such as retiree G. Yap, 69, who lives alone, to take their time. ‘One day, if you need to do it, the scheme will still be there,’ he said.

Madam Yap, whose two children live abroad, said: ‘I may have to move to an old-age home later, so maybe I should have more cash in hand.

‘I have to do my maths first, but it is an attractive scheme.’

Yesterday’s session was an HDB effort to explain the scheme, and it has spread the word to about 80 per cent of eligible households. The first group of successful applicants can expect to get the first cash payout next month.

How the HDB scheme works

Who qualifies?
Singaporeans who own three-room or smaller HDB flats where the remaining mortgage is $5,000 or lower.

They must be aged 62 or older, have a household income of $3,000 or less and owned the flat for at least five years.

They must not own or have owned a larger property. Also, they must have received only one housing subsidy.

What they get
A monthly payout that can range from $470 to $800, depending on their age and the flat’s market value.

A $10,000 subsidy: $5,000 in cash and $5,000 towards the Central Provident Fund annuity.
If the owner dies before his remaining lease runs out, his family gets a refund of the balance and the unused annuity.

Source: Straits Times, 20 April 2009

HDB lease buyback scheme draws interest

Madam Cheng Ai King has lived in the same three-room Housing Board flat in Serangoon Central for the last 23 years.

At 67, she still works as a school canteen helper, earning $30 a day.

She could use some extra cash, but she has no wish to leave the familiarity of her neighbourhood.
‘I have lots of good neighbours and my flat is conveniently located,’ said Madam Cheng, who lives alone now, after her three grown children moved out.

So, when HDB officers at a community event told her about a new scheme that will give her an income for life, and allow her to stay on in her home, her interest was piqued.

This Lease Buyback Scheme was launched on March 1, and the HDB has been on an outreach drive since, to get elderly residents to understand how it works.

Eligibility is limited to those aged 62 and above, and living in three-room flats or smaller.
About 25,000 households are eligible. Under the scheme, the HDB will buy back the tail-end of a flat’s lease at market rate, leaving a 30-year remaining lease.

A home owner under the scheme receives upfront a lump sum of $5,000 and a certain monthly annuity payout for life.

Yesterday, about 400 seniors were at Toa Payoh West Community Club to meet Education Minister and MP for Bishan-Toa Payoh GRC, Dr Ng Eng Hen.

Dr Ng, who is also Second Minister for Defence, said the scheme would be useful for older Singaporeans who may have stopped working early or did not have an opportunity to save enough in their Central Provident Fund accounts.

‘Some used their money for their homes, some helped their children to buy homes. They may not have a steady income for life.’

Dr Ng said many residents told him on his rounds that they are comfortable where they are and do not wish to move or downgrade to a smaller flat.

Some value their privacy and do not wish to sublet rooms. ‘If they don’t like the other options, this is very attractive,’ he said.

HDB will run exhibitions at six other locations in the next month, including MacPherson, Queenstown and Kaki Bukit.

Source: Straits Times, 28 Mar 2009

Er, what is the Lease Buyback Scheme?

Where do you see this?

On the HDB’s website and in newspaper articles.

What does it mean?

The Lease Buyback Scheme, officially launched on March 1, helps the elderly sell their HDB flats to the Government for cash.

The HDB will buy back the tail-end of a flat lease at market valuation, leaving a 30-year lease for the household.

For example, if a flat has a remaining lease of 70 years, the HDB buys 40 years of the lease from the flat owner.

It pays market rate for the lease it buys and this money goes to the new CPF Life annuity in the flat owner’s name. He will receive a monthly stream of income for life.

To be eligible, a home owner must be aged 62 and above, own a three-room or smaller flat, have enjoyed only one housing subsidy and have almost paid off his home loan.

He must also have owned the existing flat for five years or more.

If the owner dies before he lives out the 30 years, his family can get a refund of the remaining lease.

If they are the beneficiaries of his annuity plan, they will also be given full refund of the unused portion of his annuity.

Why is it important?

The scheme is useful to our ageing society. Studies have shown that residents in Singapore aged 65 years or older will triple from 300,000 currently to 900,000 in 2030.

Currently, the HDB has a range of options to help elderly home owners unlock their flat value, such as moving in with their children while subletting their whole flat.

Besides offering an alternative option to older Singaporeans, the scheme eases the Government’s burden to take care of the needs of the elderly.

So you want to use the term. Just say…

‘I’m not really worried about growing old and being penniless. There’s always the Lease Buyback Scheme to turn to.’

Source: Straits Times, 15 Mar 2009

‘I can’t take the flat with me when I die’

AT 72, Mr Koh Chiong Eng is worried he may lose his job as a petrol pump assistant.

That is why he was among the five who signed up for the Lease Buyback scheme, which was officially launched yesterday some two years after Prime Minister Lee Hsien Loong mooted the idea.

“I can’t take the flat with me if I die. It’s better to sell it to the Government and get some money to meet my daily needs,” he said.

Mr Koh, who lives with his wife, will receive about $600 monthly for the rest of their lives based on the $236,000 value of their three-room Tampines flat.

Under the scheme, lessees of two- or three-bedroom flats aged 62 and above effectively sell the tail-end of the lease — at market value — to the Housing and Development Board (HDB), leaving them with a shorter 30-year lease. The lessee then receives a monthly payout from a CPF annuity plan while continuing to live in his or her existing home.

The Government will offer a $10,000 “bonus” to those who sign up — half of it in cash upfront, and the remainder into the annuity.

Speaking to some 200 senior citizens at Tampines Central Community Complex yesterday, National Development Minister Mah Bow Tan stressed that the Government is “not forcing anyone to sell” their flats; rather, the scheme is an “additional option” which can help them have a “more comfortable retirement”.

Describing the scheme as a “generous” one which gives those who sign up the “best of both worlds”, he urged those who are eligible to “seriously consider” taking up the offer.

HDB will be reaching out to the estimated 25,000 elderly households who qualify, Mr Mah told reporters.

Over the next two months, it will organise exhibitions at 11 areas around the island where there are high numbers of elderly households to raise awareness and understanding of the scheme.

HDB officers will also be going door-to-door to answer queries and give out information booklets.

Retiree Madam Choi Lai, 63, who lives in a four-room flat in Queenstown with her husband, expressed hope that the rules would be relaxed so that she could qualify for the scheme. “I want to keep my home too if the time comes when I need more income,” she said.

Mr Mah noted that the priority now is to help smaller flat owners, who are more likely to be from the lower-income bracket. “The four roomers have other options because you can still downgrade to a three-room studio apartment, and they are able to unlock the value,” he said. “With the three roomers, it is much harder to downgrade. They are the ones who are more in need of this scheme.”
But he added that the scheme may be extended, based on feedback and demand.

To find out more, visit HDB branch offices or call 1800-5556363.

Source: Today, 2 Mar 2009

HDB’s lease buyback scheme launched

MR KOH Chiong Eng’s three-room HDB flat at Tampines is his biggest asset. The 72-year-old petrol station attendant and his 69-year-old wife, Madam Lim Poh Choon, have lived there for 23 years.

Mr Koh, who takes home $800 a month, does not think he will lose his job any time soon. He has about $55,000 in savings and CPF.

But with the economy in such an uncertain state, he took what he called the logical step: he ‘unlocked’ the cash from his flat.

He is one of five elderly people who became the first to sign up for the Government’s Lease Buyback Scheme launched yesterday.

Basically, he is selling 30 years of the 76 years left of his lease to the Government – in return for $5,000 cash and a monthly annuity payout of about $500 from CPF Life.

‘We’re both getting old and the monthly payout will be very helpful,’ said Mr Koh in Mandarin.

‘I’ve a 42-year-old daughter who sells electronics, but she doesn’t give us a monthly sum as she
doesn’t earn very much and has two children to support.’

Mr Koh is not worried that his daughter would be left high and dry should anything happen to him and his wife any time soon.

She can still get a refund of the remaining flat lease as well as a full refund of the unused premium from the annuity plan.

The buyback scheme, first announced by Prime Minister Lee Hsien Loong at the National Day Rally two years ago, is the latest in recent years to help retirees use their home to fund their living expenses.

Currently, they can move in with their children while subletting their whole flat; sell their flat and move to a smaller flat; or take even take up a reverse mortgage on their flat.

The last option, which allows home owners to borrow against the value of their property, is offered by insurers like NTUC Income.

But this scheme has not been popular as people are afraid the amount they have withdrawn plus interest may exceed the value of their flat at some point in the future, said Mr Leong Sze Hian, president of the Society of Financial Service Professionals.

According to the Committee on Ageing Issues, residents aged 65 years or older will triple from 300,000 currently to 900,000 in 2030.

In all, about 25,000 households are eligible for the buyback scheme, which is limited to those above 62 living in three-room flats and smaller. They represent about 70 per cent of elderly households in two- and three-room flats.

About 600 Tampines and Simei residents eligible for the scheme were invited to the launch, officiated by National Development Minister Mah Bow Tan.

The scheme, he said, builds on Singapore’s life-cycle to home ownership. ‘For the young couple, HDB helps them purchase their first flat…When the family reaches old age, HDB gives them a second set of ‘keys’ – this time, to unlock or monetise their flat’s value,’ said Mr Mah.

If the flat owner dies before the 30 years is up, his family gets a pro-rated refund from HDB, he said.

‘HDB will (also) work with them to ensure a roof over their head beyond the 30 years.’

Mr Mah added: ‘Some residents have asked me: ‘Why is the Government forcing them to sell their flats?’ I want to say clearly that we’re not forcing anyone to sell anything.’

Mr Bohari Markani, 78, is one of those who does not intend to get on the scheme. He wants to pass down his three-room flat in Tampines to his 51-year-old daughter, Asnah, who is unemployed.
HDB will organise exhibitions at 11 locations including MacPherson, Queenstown, Toa Payoh Central, Radin Mas and Kampong Glam to explain how the scheme works.

——————————————————————————————–

THE SCHEME

IS meant for Singaporeans owning three-room or smaller flats where the outstanding mortgage loan is $5,000 or less.

They must also:

• be at least 62 years old;
• not have a household income of more than $3,000;
• not have previously owned a four-room or larger flat or private property;
• not have enjoyed more than one housing subsidy;
• have owned the existing flat for five years or more.

How it works

LET us say a man, aged 62, has a three-room flat with 70 years left on its lease and which fetches $236,000 in the market.

What happens: HDB buys 40 years of the lease, worth $104,000. The Government tops this up with a subsidy of $10,000. This totals $114,000.

The man continues to stay in the flat, which has a lease of 30 years left.

What he gets: $5,000 in cash upfront and $530 a month as the remaining $109,000 will be used to buy an annuity from CPF Board that pays him for life.

(The equivalent payout for a 62-year-old woman is $490.)

If the flat is jointly owned by an elderly couple both aged 62, the monthly payout is $510.

If he dies within 30 years: His wife or child who live in the flat can stay there for what is left of the 30 years.

They have another option, which is to return the flat to HDB and get a refund for the remaining lease.

If they are named as his beneficiaries, they will be refunded the unused premium of the annuity plan. $5,000 in cash upfront and $530 a month as the remaining $109,000 will be used to buy an annuity from CPF Board that pays him for life. (The equivalent payout for a 62-year-old woman is $490.)

If the flat is jointly owned by an elderly couple both aged 62, the monthly payout is $510.

If he dies within 30 years: His wife or child who live in the flat can stay there for what is left of the 30 years.

They have another option, which is to return the flat to HDB and get a refund for the remaining lease.

If they are named as his beneficiaries, they will be refunded the unused premium of the annuity plan.

Source: Straits Times, 2 Mar 2009

HDB Lease Buyback Scheme kicks off

SINGAPORE : Singapore’s Housing and Development Board Lease Buyback Scheme started on Sunday, after two years in the works.

Five applications were received in the first hour. The scheme is designed to help cash-poor, asset-rich seniors meet their retirement needs.

72-year-old Koh Chiong Eng is afraid he may lose his petrol pump attendant job soon because of his age.

If that happens, meeting daily expenditure will become difficult, as his wife does not work.

Hence, they were among the first in Singapore to sign up for the Lease Buyback Scheme – where HDB buys back the tail-end of the lease of their flat, leaving them with a shorter 30-year lease.

They will get a first-time payout of S$5,000, and monthly payments of about S$600 till death.

The amount is calculated based on the estimated valuation of their their-room flat – at S$236,000.

The payout varies depending on the valuation of the flat, done by independent assessors.

An estimated 25,000 households are eligible for the scheme, and concerns have been raised about some seniors’ reluctance to part with their properties.

But it is not an issue with Mr Koh. He said: “I can’t take the flat with me if I die. It is better to sell it to the government and get money to meet my daily needs.”

Some seniors are also reluctant because of the Asian value of leaving property to their children.

Commenting on the issue, National Development Minister Mah Bow Tan said: “I hope at the same time, their children will also look after them. But you and I know that this is not a given.” Seniors will get to stay in their homes for 30 years after they sign up. And if they are still alive after the 30-year lease, alternative arrangements such as nursing home stays, will be made for them.

Mr Mah said: “The benefit of the scheme really is, you stay where you are and you get a rental income. My instruction to HDB is to make sure that as many eligible elderly households as possible are familiar with the scheme.”

So HDB will organise exhibitions at 11 towns with a high elderly population.

Officers will also go door-to-door to invite the elderly to the exhibitions.

To be eligible, home owners must be aged 62 and above, enjoyed only one housing subsidy, and almost paid off their home loan.

The scheme is not open to those living in four-room or larger flats.

Mr Mah said this is because they have the option of downgrading to unlock the value of their homes, and get cash. But he said HDB may consider extending the scheme to them, if there is sufficient demand.

Source: Channel News Asia, 1 Mar 2009

First-time flat buyers get more aid

FINANCE assistant Ang Li Shan, 27, and her fiance Alex Chan, 35, have enjoyed a double dollop of good news in their quest to buy a flat.

Last month, before the Budget, they asked the Housing Board about buying a three-room resale flat. They were thrilled to learn that if they bought a flat near Ms Ang’s parents’, they would get a $40,000 HDB grant.

Now with the Budget comes more good news. As first-time home buyers with a combined income of less than $5,000, they will get an extra grant of $10,000. The earlier $4,000 income ceiling had ruled them out.

‘The raising of the income ceiling is great news,’ said Ms Ang. ‘Given the uncertain times, we want to keep our loans as low as possible.’

WHAT’S NEW IN THIS BUDGET
For first-timers buyers of HDB flats, there will be tweaks to the Additional CPF Housing Grant (AHG), with the maximum amount now raised by $10,000. Buyers must be continuously employed for at least a year instead of two. The income ceiling will be raised to $5,000 a month.

Home owners facing financial problems can also defer monthly HDB loan repayments for up to six months and reduce the monthly repayment amount.

A new interim rental housing scheme will enable home owners to sell their HDB flats and buy new, smaller flats. While these are being built, they can move into rental flats priced below the market rate

For new home owners, the Government will lift the supply of studio apartments, two- and three-room flats to add to 4,800 such units now available.

From next month, older Singaporeans can benefit from a Lease Buyback Scheme which will allow those in three-room or smaller flats to sell the tail end of their lease back to HDB and still stay in their flats.

Source: Straits Times – 19 Feb 2009

Selling point of lease buy-back: Its simplicity

IN AN economic downturn, no one is immune from hardship. But for the elderly, recession can compound difficulties already being encountered. Those with adult-aged children who are able to shoulder the burden of care need not worry too much. But for an increasing number of senior citizens, this is not an option. Indeed, while the recession brings financial independence for the elderly into sharper focus, this is an issue that goes beyond the immediate. In the light of this, the Housing Board programme to offer to buy back a portion of the lease of small HDB flats from the elderly is an innovative approach in mitigating the problem.

First announced in Prime Minister Lee Hsien Loong’s 2007 National Day Rally speech, details of the lease buy-back were recently unveiled for its launch next month. Of course, the programme is not for everyone. The conditions placed – only for owners aged at least 62 of three-room or smaller flats, who have not owned larger HDB or private-sector flats before, and so on – mean it will be available to a limited number of people. But this is a group of seniors who have problems accessing value despite owning property. Usually, the market favours larger flats, as buyers seek to move up the housing ladder. Thus, the programme scores by greatly widening the opportunity to tap locked-in capital.

Next, many elderly citizens are reluctant to sell out in the first place because they do not want to move out of homes in which they have invested practically a lifetime’s work. The programme addresses this since participants will sell only a portion of the remaining lease on their homes.

They are able to continue to live in these flats. And if they outlive the leftover lease period, the HDB may either extend the lease or provide alternative accommodation. In the meantime, they receive monthly payouts from an annuity paid for with the lease sale and a portion of a $10,000 grant from the HDB.

The plan addresses issues that a participant may have doubts about. Of course, there will be comparisons made with reverse mortgages, which have not proved popular. Promoting the lease buy-back programme will, to a degree, centre on explaining the difference of the scheme from reverse mortgages – which involve complex considerations of interest rates and property values over time. Ultimately, it is up to home owners to decide if they are comfortable about participating in the programme. One significant virtue of this plan is the simplicity of its structure.

Source: Straits Times – 11 Feb 2009

Lease buy-back for elderly from March

Eligible home owners urged to seriously consider the scheme.

STARTING from March 1, elderly folk can apply to the Housing Board to unlock the value of their homes for cash – while continuing to live in the flats.

Full details of the long-awaited ‘lease buy-back scheme’ were unveiled by National Development Minister Mah Bow Tan in Parliament yesterday.

The initiative, designed to allow the elderly to obtain cash for living expenses by drawing value from their homes, was first announced by Prime Minister Lee Hsien Loong at the 2007 National Day Rally.

Mr Mah yesterday strongly urged eligible home owners – those 62 and above – to sign on: ‘It is a good and generous scheme and I would like to urge MPs…to explain this scheme to their residents.’

He also stressed that HDB flats were not for ’speculation, or quick profit’.

The lease buy-back scheme reflects this point by recognising that home owners will be in a position to unlock the value of flats when they grow old, he added.

For retirees like 69-year-old Teng Kiat Hwa, who owns a three-room HDB flat in Toa Payoh, this scheme is a serious option. He fell ill years ago and stopped driving a taxi. He has had no income for at least five years and medical bills have depleted his CPF money.

If he signs on, he will be able to sell part of his flat’s lease to the HDB, receive cash upfront of $5,000 and a monthly annuity payout of $500.

This is how it works: HDB will buy back the tail-end of a flat’s lease at market valuation, leaving a 30-year lease for the household.

So, for example, if a flat has a remaining lease of 70 years, HDB buys 40 years of the lease from the flat owner. It pays market rate for the lease it buys and this money goes to a new CPF Life annuity in the flat owner’s name.

In addition, HDB will give the applicant a $10,000 grant. He will get $5,000 cash upfront, and the other $5,000 goes into the CPF Life plan.

The payout is enough to give a typical flat owner about $500 monthly for life. At the end of 30 years, the flat’s ownership is transferred to HDB.

Mr Mah yesterday also allayed concerns from MPs such as Dr Muhammad Faishal Ibrahim (Marine Parade GRC) on what happens if the flat owner dies before the 30 years is up.

In this case, his family can either choose to live in that flat or get a pro-rated refund from the HDB.
In addition, his family will be given the full refund of the undrawn premium from the annuity plan, said Mr Mah.

If the owner outlives the 30-year lease, the HDB may extend the lease or find them alternative accommodation, added Mr Mah.

This scheme is currently only for those aged 62 and above and who own two- or three-room HDB flats. About 25,000 low-income households in Singapore will be eligible.

Mr Masagos Zulkifli (Tampines GRC) raised the question of whether it could be expanded to include elderly folk who own four-room flats.

Let us wait, said Mr Mah, until the scheme is rolled out and public response and feedback has been gathered.

‘But I am open to options of extending the scheme,’ he said.

Speaking to The Straits Times, Mr Teng said he would ’seriously consider’ the option now.

His son Teng Kang Cheng, 41, said it was a ‘good idea’ but was concerned that the flat could not be left to the next generation.

‘We have to discuss and weigh the options now,’ he said.

There is also the issue of conveying the details of the scheme to elderly folk who are Mandarin speakers like the elder Mr Teng.

This point was brought up by Madam Ho Geok Choo (West Coast GRC), who asked if HDB had any plans to raise awareness of the scheme.

Mr Mah said that there will be a ‘major launch’ for the initiative.

‘We will involve all the advisers, especially those who have larger numbers of senior citizens in their constituencies in this exercise,’ he said.

Unlocking the value of flat: How it works

HERE is an example of how the scheme will work. Take a three-room flat with 70 years left on the lease, with a market value of $236,000.

1. Flat owner sells the Housing Board 40 years of the lease, and continues to live in the flat under the remaining 30-year lease.
2. HDB buys the 40-year lease at $104,000, a figure calculated by an industry valuer. In addition, it gives the flat owner an additional $10,000 grant.
3. Of this total value, flat owner gets $5,000 as cash upfront. The rest goes to buy a new CPF Life annuity for the flat owner.
4. He gets about $500 monthly for life.

If the flat owner dies before the 30 years is up, his family:

• can choose to live in that flat
• or get a pro-rated refund from the HDB
• will be given the full refund of the undrawn premium from the annuity plan.For example, if $100,000 was used from the sale of the flat to purchase the annuity plan and the owner dies after receiving $10,000, his family will be given the remaining $90,000.

If the flat owner outlives the 30-year lease, HDB may extend the lease or find alternative accommodation for him.

Conditions:

• own three-room or smaller flat
• outstanding loan is $5,000 or less
• owner is 62 years or older
• household income of $3,000 or less
• owner has not previously owned a four-room or larger flat, or private property
• owner has received only one housing subsidy
• has owned existing flat for five years or more

Source: Straits Times – 7 Feb 2009