HDB housing grants, are they really "free"?

The Additional CPF Housing Grant (AHG) and Enhanced Grant Scheme, introduced in March 2006, is meant to help citizen families with a steady household income to buy their first subsidised HDB flat. Supposedly, the Grant is to reduce the monthly installment for the buyer.
I was a property agent. From what I observed, buyers who took these housing grants will usually sell their flat at a loss with no money coming out from their sale. The longer they wait to sell their flat, the bigger their paper loss from their CPF account.
This is the true picture. Initially, the grant will be disbursed into you & your co-applicant’s CPF Ordinary Accounts and it will be deducted from your CPF Ordinary Account in one lump sum on that day of purchase.
However, when you sell your HDB flat, you are also required to use the sale proceeds to pay back whatever is outstanding in the HDB loan and followed by the housing grant that was given to you initially in CPF.
Therefore, if you sell your flat at $500,000 and you have an outstanding HDB loan of $200,000 followed by a CPF refund of $100,000. If you have taken a housing grant of $40,000, you are also required to make good of the whatever left sale proceeds to replace the $40,000 in your CPF with the accrued interest over the years. .
CPF interest rates are 2.5 per cent per annum. If you waited for 5 years to sell your flat, your accrued yearly interest on the housing grant would be 2.5% of the $40,000.
It is no wonder that many sellers who took housing grants would sell their flat without any cash proceeds coming out from their sale.
Of course, if the seller sells at valuation, CPF doesn’t require the seller to top up the paper loss but then again, without any cash proceeds, the seller has to use his/her own money to fork out the cash to pay for his agent’s commission. In some cases, under-the-table money and under declaration will occur.
I have observed how some buyers circumvent this loophole. They simply refused to take the housing grant but instead willing to fork out their own cash for higher installment. Their rationale is that since banks’ annual interest rates are lower than CPF interest rates of 2.5%, they are willing to use their own money cash from the bank to pay for the slightly higher monthly installment.
These buyers are usually Singapore PR who want to stay in Singapore for a few years before they decamp to greener pastures elsewhere.
Edmund Lim
[1] http://www.todayonline.com/Singapore/EDC120801-0000042/Grant-for-low-income-households-enhanced
[2] http://www.todayonline.com/Singapore/EDC120806-0000538/20,000-new-HDB-flats-to-be-built-next-year

Not only you have to return the interest provided by the housing grant, if you used up your two allocations, you have to payback when you apply for the third flat a percentage of your previous flat sold depending on the type you have applied eg 3/4/5/Executive/Maisonette. Not only that, if you downgrade to a rental flat your rental premium will be based on market rates, when it is deemed you have used up your allocation and can afford to pay. So it is better you seriously consider properly using the HDB “subsidy” because there is a catch, there is payback and not entirely “free”.
After you sell the flat, you need to payback the grant you take back into your CPF account with interests, which you cannot touch until you retire, but pay CASH upfront a percentage from your sales when applying for a third flat under direct from HDB.
And if you are a retired person who wants to downgrade to a studio, do not use the S$20K grant because you need to topup your CPF minimum sum in CASH, you take S$20K but you will definitely payback more. “HDB grant subsidies” to help the low income, what a joke!
I am not so stupid to buy a HDB flat at market rates where it is impossible to use as collateral which is deemed “illiquid asset”, where you cannot convert your CPF into CASH.
– Contributed by Oogle.

FBI launches $1 billion nationwide facial recognition system

By on September 7, 2012 at 1:08 pm
The US Federal Bureau of Investigation has begun rolling out its new $1 billion biometric Next Generation Identification (NGI) system. In essence, NGI is a nationwide database of mugshots, iris scans, DNA records, voice samples, and other biometrics, that will help the FBI identify and catch criminals — but it is how this biometric data is captured, through a nationwide network of cameras and photo databases, that is raising the eyebrows of privacy advocates.
Until now, the FBI relied on IAFIS, a national fingerprint database that has long been due an overhaul. Over the last few months, the FBI has been pilot testing a facial recognition system — and soon, detectives will also be able to search the system for other biometrics such as DNA records and iris scans. In theory, this should result in much faster positive identifications of criminals and fewer unsolved cases.
According to New Scientist, facial recognition systems have reached the point where they can match a single face from a pool of 1.6 million mugshots/passport photos with 92% accuracy, in under 1.2 seconds [PDF]. In the case of automated, biometric border controls where your face and corresponding mugshot are well lit, the accuracy approaches 100%. Likewise, where DNA or iris records exist, it’s a very expedient way of accurately identifying suspects.
FBI Biometrics logo 
So far, so good — catching criminals faster and making less false arrests must be a good thing, right? Well, yes, but there are some important caveats that we must bear in mind. For a start, the pilot study has only used mugshots and driving license photos of known criminals — but the FBI hasn’t guaranteed that this will always be the case. There may come a time when the NGI is filled with as many photos as possible, from as many sources as possible, of as many people as possible — criminal or otherwise. This might be as overt as parsing CCTV footage and collating every single face into a database; or maybe you’re just unlucky and your face ends up in the system because you’re in the background of a photo starring a known criminal.
Imagine if the NGI had full access to every driving license and passport photo in the country — and DNA records kept by doctors, and iris scans kept by businesses. The FBI’s NGI, if the right checks and balances aren’t in place, could very easily become a tool that decimates civilian privacy and freedom. Time to invest in a hoodie, I think…
Read: Precrime creeps closer to reality, with predictive smartphone location tracking