No. An FDH should work and reside in the employer's residence in accordance with Clause 3 of the Standard Employment Contract (ID407). The employer is required to provide the FDH with free accommodation as per the standard specified in the "Schedule of Accommodation and Domestic Duties" of the employment contract.
(Employers who have obtained the Director of Immigration's approval before 1 April 2003 to let their FDHs live out can continue to do so, so long as they continue to employ FDHs without a break of more than 6 months.)