Chapter 1 - Income

The retired Senior without a pension may wish to consider getting an income in the following two ways.

Rent out your HDB flat/bedrooms.
If you own an HDB flat, you may rent it or its rooms. To rent out the entire flat, you require HDB approval. To rent out one or more bedrooms, you do not require HDB approval, but you must live in one bedroom. In either case, the total number of occupants in the flat must not exceed 6 (3-room) or 8 (4-room or larger) inclusive of yourself and family.

Update on 4 Mar 2007 - The rule has been relaxed this month! If yours is a 'resale' flat ie you bought it from someone, you can rent it out if you have lived in it for at least 3 years. If yours is a 'new' flat ie you bought it directly from HDB, you can rent it out if you have lived in it for at least 5 years. This was reported in the Sunday Times on 4 Mar 2007. HDB has updated its website to reflect this information.

You are responsible to ensure that your subtenant(s) comply with all conditions of your Lease with the HDB. If they are foreigners, you are responsible to check and ensure that they are not illegal immigrants or overstayers. To do so, check to see that details in their employment or student pass or work permit tally with those in their passports. Then check the validity of the Employment Pass here, or Work Permit here, or call Ministry of Manpower (tel: 64385122). Then, check their immigration status by clicking the Verify Immigration Pass button here at Immigration & Customs Authority (tel: 6396100).

More details flat/rooms subletting at HDB subletting website.

You can download a free sample Tenancy Agreement from the Consumers Association of Singapore (CASE) website.



Reverse Mortgage your HDB flat
Written by Johnson Choo, Channel NewsAsia
Friday, 03 March 2006

HDB flat owners can now take a reverse mortgage against their home, National Development Minister Mah Bow Tan has announced in Parliament.But he warned that this would be done on commercial terms, and the government would not be providing any financial assistance or guarantees to providers of such schemes.

Mooted since 1984, the much debated reverse property mortgage scheme was offered five years ago for private properties. But there have been calls for the government to extend it to HDB flats, so that older Singaporeans can unlock the value of their properties and have enough money for their sunset years.

The National Development Minister says the government will indeed widen the scheme. Said Mr Mah, "We will work with industry players to facilitate the provision of such schemes, so that elderly HDB lessees will have more options to monetise their flats to enhance their retirement adequacy."

The scheme, which is for a maximum 20 years, is open to flat-owners who are at least 70 years old but no older than 90. Their property must also have a remaining tenure of 50 years at the end of the loan period. NTUC Income is ready to go, having worked on a proposal to the government.

Said NTUC Income CEO Tan Kin Lian, "We're starting with a promotion, where our interest rate is pegged at quite low -- 5 percent per annum ... Especially the older HDB owners, because they may have used up all their savings, they can take a monthly sum under a reverse mortgage against their HDB flat."

Mr Mah cautions that owners should take into account the terms offered and consider other alternatives before deciding on a reverse mortgage.

* HDB on Reverse Mortgaging its flats

* NTUC Income’s Reverse Mortgage for HDB flats


Question :
My father, aged 70 is the sole owner of a 3-room HDB flat and has fully paid for the purchase of the flat about 30 years ago. Currently, my mother and brother stays with him in this flat. My mother and brother have paid for the renovation, some home installation and electricty and water bills during these years.

If my father decides to reverse mortgage this flat to the insurance company without his family member's knowledge, is there any law to protect the interest of his spouse or occupiers of the flat?Before a reverse mortgage is approved by the insurance company, is my mother's consent needed?If my father passes away, will the insurance company boot my mother and brother out of the flat?Thank you.
ST reader


Answer : Reverse Mortgage scheme to benefit older HDB owners whose savings have been depleted.

NTUC Income offers the reverse mortgage scheme to benefit older HDB owners whose savings have been depleted. We start this new scheme with an affordable interest rate of 5 per cent per annum to HDB owners. This interest rate is much lower than many other forms of debt available in the market.

Under reverse mortgage, property owners mortgage their properties to NTUC Income and draw cash regularly as a loan from us. These regular cash advances from NTUC Income are used to meet their retirement expenses. They continue to retain ownership and stay in their homes.

When applying for a reverse mortgage, a family member of the applicant needs to be present and confirm his/her awareness that the property will be under reverse mortgage.The family member will also witness the acceptance of the Letter of Offer andpartake in the execution of the mortgage documents.

When the property owner passes away, we will discuss options with family members on how the deceased's estate will settle the outstanding loan. These options include allowing the family member to take over the loan and the property.

Any person who intends to take up a reverse mortgage should consider the interests of the spouse and children. He should see if it is necessary to reflect their interests as a joint legal owner in the property.If you wish to find out more about reverse mortgages, you can call our hotline at 6788 1122 or visit our website at www.income.coop/loans/reversemortgage/revmorthdb.asp.

We invite you and your family members to attend an educational session conducted by us. We will explain how the reverse mortgage works and answer your questions.You may wish to seek an independent professional advice with regards to the legal rights of the your mother and brother.
Tan Kin Lian
Chief Executive Officer
NTUC Income
17 March 2006