Buying HDB Resale Flat

Before embarking on your home-buying journey, obtain an HDB Flat Eligibility (HFE) letter through the HDB Flat Portal to comprehensively understand your housing and financing options. This letter will provide you with upfront information regarding your eligibility to purchase a new or resale flat and the amount of CPF housing grants and HDB housing loan for which you qualify.

• You will receive the HFE letter from HDB within 21 working days. The processing time may be longer during the peak periods.
• HFE is valid for six months from the date of issue.

There are various eligibility schemes under which you can buy an HDB resale flat:

• HDB Public Scheme – Buy an HDB resale flat with your family.
• HDB Fiancé or Fiancée Scheme – Buy an HDB resale flat with your fiancé or fiancée.
• Single Singapore Citizen Scheme – Buy an HDB resale flat as a single.
• Joint Singles Scheme – 2 to 4 singles buy an HDB resale flat jointly.
• Non-Citizen Spouse Scheme – Buy an HDB resale flat with your spouse (not an SC or SPR).
• Non-Citizen Family Scheme – Buy an HDB resale flat with your family members who are not SC or SPR.
• HDB Orphan Scheme – Buy an HDB resale flat with your sibling(s) who are orphans and single.
• HDB Conversion Scheme – Buy adjoining HDB resale flats with your family. The HDB flats are 3 rooms or smaller and convert them into 1 unit. (Subject to approval).

You need to check if you are eligible for an HDB resale flat.

Eligibility Conditions That Apply To All Schemes

• At least one Singapore Citizen or two Singapore PRs must be listed in the application for buying an HDB resale flat.
• For SPR households, there’s a requirement for all SPR essential occupiers and owners to wait for three years from the date of obtaining their SPR status before they can buy an HDB resale flat.
• HDB buyers must fulfil the SPR quota and the EIP proportion requirements for the neighbourhood and block.
• Unlike buying a BTO from HDB Board, if you were to buy an HDB resale flat from the resale market, there is no limitation for the income ceiling.
• If you apply for CPF Housing Grants or HDB housing loans for your HDB resale flat purchase, you must note the income ceilings.
• If you or any person listed in the HDB resale flat application owns an HDB flat, the HDB flat must be disposed of within six months of the HDB resale flat purchase.
• Suppose you or any person listed in the HDB resale flat application owns private property, either overseas or locally; all private properties must be disposed of before or within six months of the HDB resale flat purchase. Also, you are not eligible for the CPF Housing Grant or HDB housing loan.
• Divorcees are required to produce the following for verification:
  • Interim Judgment (previously known as Decree Nisi)
  • Order of Court
  • Final Judgment (previously known as Decree Nisi Absolute)

The Housing & Development Board will determine the actual approval upon buyers’ application submission and necessary supporting documents.

It is a requirement for all individuals listed in the HDB flat application, whether they are applicants or occupiers, not to possess or have any stake in any private property either locally or overseas.

In the event that you have disposed of any private residential property:

• If you intend to acquire an HDB flat, purchase a resale flat with CPF housing grants or request a housing loan from HDB, you must wait for at least 30 months before you can apply for HFE letter.
• If you intend to buy a non-subsidised resale flat (including Proximity Housing Grant), you must wait for at least 15 months before you can apply for HFE letter.

Individuals aged 55 and above, along with their spouses, who possess or have a stake in a private residential property are exempted from fulfilling the duration requirements mentioned. This exemption is applicable if they plan to purchase any of the following:

• a Short-lease 2-room Flexi flat or Community Care Apartment from HDB, or
• a non-subsidised resale flat with a maximum of 4 rooms (they can apply for the Proximity Housing Grant, provided they meet the eligibility criteria).

However, they are obligated to dispose of their private residential property within half a year after the completion of their flat purchase.

As long as you are a Singapore Citizen (SC) who is single and at least 35 years old:

• You can purchase a 2-room Flexi flat in a non-mature estate if you plan on buying a new flat.
• If you want to buy a resale flat, you can select any type of flat (excluding 3Gen flats) in any location.
• If you intend to apply for CPF housing grants, select a 5-room or smaller resale flat.

Buying a flat is a big financial commitment. If necessary, you will need to carefully manage your cash and CPF savings and secure financing through an HDB housing loan or a housing loan from a bank.

Before committing to a flat, think through the following:

• What is your budget to purchase a flat?
• What are the other costs associated with the flat purchase?
• What other financial commitments would you have?
• How do you keep the cost of your purchase low?

There are several financial considerations you need to take note of that help to work out a comprehensive financial plan:

• Costs and Fees for Buying HDB Resale Flat
• Cash Payment for Buying HDB Resale Flat
• HDB Resale Flat Down Payment
• Using CPF Savings
• Housing Loan
• CPF Housing Grant Scheme
• Enhanced Contra Facility

Better managing the financial planning for your resale flat purchase will help you determine the best suitable home choices.

How to go about buying your HDB resale flat? To purchase an HDB resale flat, you can either engage a salesperson to assist you or manage the transaction yourself.

From planning your finances, looking for an HDB flat, negotiating, application submission, attending HDB appointments, and extending your stay until you move into your flat. Many unexpected factors will impact the ultimate buying experience. Therefore, it is crucial to understand the entire process.

Before you commit to buying an HDB resale flat, make sure you have enough time to make the necessary preparations.

Working out a comfortable housing loan plan within your affordability and budget is essential. Do not overstretch yourself financially.

You can get a housing loan from a bank or a housing loan from HDB to help you finance your HDB resale flat purchase. How much loan you can obtain depends on your age, income and financial standing.

Following are some of the considerations you need to take note of:

• HDB Loan for Resale Flat
  • If you intend to get an HDB concessionary housing loan for your flat purchase, you must first apply for an HDB Flat Eligibility (HFE) letter.
  • Before searching for a flat, you should request an HDB Flat Eligibility (HFE) letter.
  • Before signing the Option to Purchase, you must obtain a valid HDB Flat Eligibility (HFE) letter.
  • You will have to purchase the following insurance policies when you take an HDB loan:
    • HDB Fire Insurance Policy
    • Home Protection Scheme (if you are using your CPF savings to pay your monthly loan instalments)
  • The HDB Flat Eligibility (HFE) letter gives information on the following:
    • Eligibility for an HDB housing loan
    • Maximum loan amount
    • Maximum loan repayment period
    • Monthly loan instalments
    • Amount of cash proceeds that you can use to pay for the next flat (if applying for a second HDB housing loan)
  • HDB pegs the concessionary housing loan interest rate at 0.1% above the CPF Ordinary Account interest rate.
  • The repayment period will be the shortest of
    • 25 years
    • 65 years minus the average age of the applicants
    • The remaining lease at the time of flat application minus 20 years.
  • LTV Limit will be up to 80% of the flat purchase price (new flat) or up to 80% of the lower of the resale price and value (resale flat).
  • If you take an HDB housing loan, you can later refinance the HDB resale flat with a bank loan.
  • You and your essential occupiers need to meet all HDB Housing Loan Eligibility conditions:
    • At least one buyer is a Singapore Citizen.
    • You have not previously taken two or more housing loans from HDB.
    • You have taken one housing loan from HDB; the last owned property is not private residential.
    • Average gross monthly household income does not exceed:
      • $14,000 for families.
      • $21,000 for extended families.
      • $7,000 for singles
        • Buying a 5-room or smaller resale flat or 2-room new flat in a non-mature estate
    • Must not own or have disposed of any private residential property in the 30 months before the date of application for the HDB Flat Eligibility (HFE) letter.
    • Do not own more than one market/ hawker stall or commercial/ industrial property.
• Bank Loan for HDB Resale Flat
  • You can consider financing your HDB resale flat with a housing loan from a bank regulated by the Monetary Authority of Singapore (MAS).
  • Apply early for an IPA from the banks for an indicative assessment of your eligibility for a housing loan.
  • If you choose to finance your HDB resale flat with a bank loan, a valid Letter of Offer (LO) must be obtained from the bank before exercising the Option to Purchase.
  • If you take a housing loan from a bank, you will not be allowed to refinance your HDB flat with a housing loan from HDB.
  • Please spend some time studying and reviewing the different loan packages. Weigh your options carefully before deciding on one that suits you the best.
  • Interest rates differ across banks/financial institutions.
  • The repayment period will be up to 30 years.
  • LTV Limit will be up to 75% of the flat purchase price (new flat) or up to 75% of the lower of the resale price and value (resale flat).
  • A minimum of 5% of the lower of the flat price or value must be paid in cash.
  • With the integrated loan application service on the HDB Flat Portal, you can compare housing loan information from both HDB and banks and request an In-Principle (IPA) approval and Letter of Offer (LO) from participating banks.
• Mortgage Servicing Ratio
  • All HDB-issued loans, and bank-issued loans for HDB flats and ECs, have an MSR of 30%.
  • MSR = Monthly Mortgage Obligation / Gross Monthly Income x 100% ≤ 30%
  • If your monthly home loan repayment and your other mortgage obligations surpass the 30% MSR, you’ve got several options:
    • You can extend the loan tenure to lower the monthly home loan repayment.
    • You can lower the property price quantum to reduce the amount you borrow.
    • You can increase the cash down payment to lower the amount you borrow.
    • You can sell or reduce the repayments on any other properties to free up the monthly income for your new home loan repayment.

Equip yourself with enough housing loan information and options before buying your home.

Singapore Government provides housing subsidies through CPF grants to help you secure your HDB resale flat with a lesser financial burden.

You can use the CPF housing grant for the initial HDB resale flat purchase payment. It can help you with your cash flow, reduce your initial cash outlay, and reduce the mortgage loan amount.

Following are the various CPF Housing Grant Schemes offered by the Government:

• CPF Housing Grant for Family – Eligible first-timer applicants (married/engaged couples or families), who want to buy an HDB resale flat, can apply for the Family Grant.
• CPF Housing Grant for Singles – Eligible first-timer applicants (single, aged 35 or above) buying an HDB resale flat can apply for the Single Grant.
• Half-Housing Grant – Eligible first-timer applicants whose spouse / spouse-to-be had previously received a housing subsidy can apply for the Half-Housing Grant.
• Proximity Housing Grant (PHG) – Eligible HDB buyers who buy an HDB resale flat to live near or with their parents can apply for the Proximity Housing Grant.
• Additional CPF Housing Grant (AHG) – Eligible lower to middle-income first-timer applicants (married/engaged couples or families) buying an HDB resale flat can apply for the Additional CPF Housing Grant.
• Citizen Top-up – An SC/SPR household will qualify for the Citizen Top-Up when a qualifying household member becomes a Singapore Citizen.
• Top-up Grant – Recipients of a Singles Grant previously are now eligible for the Family Grant and will qualify for the Top-up Grant.
  Please refer to the individual CPF Housing Grant Schemes for more information.

CPF Board will determine the actual approval and the amount only after the HDB buyers have submitted the application and necessary supporting documents.