"With more than 1 million flats spread across 24 towns and 3 estates, the Singapore brand of public housing is uniquely different. The flats spell home for over 80% of Singapore's resident population, of which, about 90% own their home."
Source: HDB.
Welcome to all first-timers who are putting your hands in to get yourself a Singapore icon where the world-class living happens. Or, if you are a second-timer back in for another round, this easy-to-follow guide could be a good refresher for you.
Step 1: Do an eligibility check
That's an essential thing we first need to find out - can you apply? Or cannot?
To be eligible for an HDB BTO,
If you are applying as a single — you must be a citizen aged 35 and older (sorry that you can only apply for 2-room flats in non-mature estates)
If you are applying as a family nucleus — you can be:
a citizen and applying with at least one other citizen
a PR as a family nucleus, meaning your spouse and kids (if any), your parents and siblings (if any), or children under your legal custody (only for widowed/divorced applicants)
a citizen with a non-citizen spouse on a visit pass or work pass (sorry that in this case, you are also only eligible for 2-room flats in non-mature estates)
If you are applying with your fiancé or fiancee — you will have to register your marriage:
before the key collection to your BTO
before the key collection, especially if you are taking any of the additional CPF housing grants
within 3 months after getting your spanky new flat
A side note about 2-Room Flexi Flats
HDB has an interesting 2-room Flexi Scheme which is great for elderly citizens.
This programme is designed with the understanding that some elderly applicants are retirees who are right-sizing their current flats, or semi-retirees who might not have as high an income as before but still hope to have one last change to their current living environment. They have the flexibility of choosing the length of lease on their 2-room Flexi Flat, based on their age, needs, and preferences. If you are 55 and above, you can take up a lease of between 15 and 45 years in 5-year increments, as long as it covers you and your spouse up to the age of at least 95 years.
The eligibility check continues to ensure that you are not making too much money. I know...I know....since when is making too much money ever a concern in buying a property? Well, we all have to remember that BTO flats, no matter how fancy they are these days, are still subsidised public housing after all.
Here are some basic qualifying figures — income ceilings for the different unit types. Please do take note, as prices for the flats will differ based on estates, that you are still required to check on the exact income ceiling in the sales launch that you are interested in applying for:
2-room flexi flat: $7,000 for 99-year lease, or $14,000 for short-lease (max 45 year lease)
3-room flat: $7,000 or $14,000*
4-room flat or bigger: $14,000, or $21,000 — if the flat if for an extended or multi-generation family.
*HDB will specify the income ceiling for each project in the press releases.
A very very very important one:
All the listed owners and essential occupiers must not own, dispose of, or have an estate or interest in any other local or overseas property, for at least 30 months before the BTO application.
Meaning that if you are currently a private property owner, you will have to sell it, wait out 30 months before you regain your eligibility to apply for a BTO. Some owners either rent or even consider an HDB resale flat in a much-desired estate during that waiting period, for slightly longer-term gameplay for their BTO.
If you are currently a flat owner — resale or a previous BTO, you are almost on a clean slate to apply for one. You get to enjoy a longer preparation time to welcome your new house because you have up to the time of key collection to complete the sale of your current HDB flat.
Assuming you need funds from your current place to fund the new BTO, so this is when I give you a little nudge and emphasise the importance of planning a proper timeline to ensure a smooth transition to your new house. Even though you still have up to 6 months to sell your current HDB after key collection, you really do not want to juggle 2 mortgages and all the extra expenses that arise in this situation. All the money that can buy you that designer piece of furniture or that extra touch of renovation for your new flat.
I know this is like a super elaborated Step 1, but I promise once you get these fundamentals right and out of the way, the rest of it is a breeze already.
Step 2: Ballot for your desired HDB BTO
There are many BTO sales launches in many sought after areas this year. Be ahead of the game as you do the comparisons through reviews and details on OrangeTee's new initiative — BTO Analytics Dashboard. If you are a visual person like me, you will appreciate how data is being presented beautifully in less mundane way.
Once you set your eyes on a particular sales launch, you pay $10 to put your name into this national lottery. Every HDB BTO sales exercise attracts a ginormous volume of applications, and getting a successful invitation for flat selection is literally like winning the TOTO.
The whole balloting exercise is purely luck-based. You will know the results and find out if lady luck is on you in about 3 weeks after the registration window closes.
Step 3: Sort out your finances — getting your HLE or IPA.
This can be done as part of Step 1, or after Step 2 while you wait for the ballot result.
HLE (Home Loan Eligibility) is from HDB.
IPA (In-Principal Approval) is from private banks — UOB, POSB, DBS, OCBC etc.
Weighing out between HDB loan or private bank loan is another topic of its own but a quick overview:
HDB loan
requires little downpayment
lower conveyancing legal fees
interest rate has been fixed at 2.60% p.a for the longest time
Private bank loans
higher downpayment amount required
attractive loan packages and lower interest rates^
higher conveyancing legal fees by private law firms
^as of the time of publication of this post
Step 4: BTO flat selection
YAYYY!!! This is the day you have been anxiously waiting for, it is like collecting the winnings of your TOTO ticket. As you bask in the excitement, please remember to bring all essential documents as informed in the HDB letter.
Once you have selected the "this is it!!" unit, make it yours by paying an option fee (cash):
$500 for 2-room and 2-room Flexi Flats
$1,000 for 3-room flats
$2,000 for 4 room or larger flats
This is also when you will apply for any CPF Housing grant that you are eligible for.
Step 5: Sign the lease agreement and pay the downpayment
You will have 4 months to sign the lease agreement after your flat selection. When you go down to sign the papers, you are required to make the first downpayment, stamp duties and legal fees.
Buyers who are taking the HDB loan — you will have to pay 10% of the purchase price using cash and/or CPF.
Buyers who are taking the private bank loan — you will have to pay a 25% of the purchase price, of which at least 5% must be in cash and the rest can be paid using CPF.
HDB also offer a Staggered Downpayment Scheme for 2 specific groups of buyers. Find out more here.
Stamp duties can be determined using the IRAS calculator.
Step 6 (the last): Key collection!!
Just keep smiling like a Cheshire Cat and look forward to memory-making with your loved ones in this new place you called home.
Your monthly mortgage will start to kick in. If you have had salary adjustments over the years while waiting for your BTO, you can revisit your repayment methods with either cash, CPF, or both. As your family needs and lifestyle would have also have changed, it's good to be mindful about balancing your sheets as you make prudent decisions.
Do not ever feel that buying a HDB BTO is a very DIY-self-service-own-self-take-care-own-self process. As you can see, there will be timelines to be managed and finances to be worked out to ensure a smooth transition from one place to the next. Feel free to reach out to me for anything that you might need for a complimentary chat, and you know, there is no harm in hearing from another perspective too.
Otherwise, if you ever want to chat about property wealth planning, what are the available best homes to buy or find out about marketing your properties? I am all ready to provide you with convenience and clarity towards making a well-informed decision.
Data driven. Pure facts. No hype.
Let's get on a Zoom or Google call to relieve you of all the worries boggling you down.
We can discuss:
An in-depth financial affordability assessment
Timeline planning for the sale and subsequent purchase
Highly relevant industry insights
A precise and investment road map that is tailored specifically for you.
A curated list of best buys in today's market with good growth potential and minimal risks
Selecting units with the highest potential in a new launch project
Tips on marketing strategy and getting a potential buyer for your property fast
Has your property stagnated in the price? What are the reason and options you have?
Move to what moves you and be enabled to live your aspirations. See you soon!
Chris is a real estate associate with OrangeTee & Tie and is an avid #iamanarchitourist who appreciates not just the beauty of architectural and spatial design, but the monetary value of owning a piece of it in realty.
Inspired to empower her clients to live who they are, she actively applies the Property Wealth Planning (PWP)™ methodology that has creatively expanded many of their real estate portfolios.
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