HDB Housing loan!
Introduction
| HDB provides housing loans at concessionary interest rate to eligible flat buyers, subject to HDB's credit assessment and the prevailing HDB mortgage loan criteria. From 1 Jan 2007, HDB will require all potential flat buyers and transferees who wish to get an HDB concessionary loan to first obtain an HDB Loan Eligibility (HLE) letter. This HLE letter must be obtained before committing to the purchase or transfer of a flat. This will provide prior information on your loan eligibility quantum and monthly instalment to ensure you are able to pay for your home and service the loan without overstretching your finances. |  |  |
The HDB Loan Eligibility Letter (HLE) will give an indication of the loan you are eligible for but the final or NETloan that is given will depend on HDB's prevailing conditions governing the granting of loans such as the loan ceiling of 90% of selling price or value of the flat, and the amount of CPF in your ordinary account.
HDB will work out the financial plan for your net loan at the point of (a) selecting a new flat for purchase of a new flat, (b) first appointment for purchase of a resale flat or (c) processing your application for transfer of an existing flat. You can also use the online services in Sales Financial Plan and Resale Financial Plan to do an estimate of the final or NET loan amount once you have determined your loan eligibility.
Let us guide you through the process to apply for an HDB Housing Loan:-
Who Can Apply
Eligibility Conditions for HDB Concessionary loan
HDB provides housing loans at concessionary interest rate to eligible flat buyers, subject to HDB's credit assessment and prevailing mortgage loan criteria.
Since 1 January 2003, flat buyers who are not eligible for an HDB loan will have to take a loan from a bank/financial institution that is licensed by the Monetary Authority of Singapore to provide housing loans.
Flat buyers can apply for an HDB loan if you and / or your essential occupiers (if any):
(a) | have at least one buyer who is a Singapore citizen; | ||||||||
(b) | have average gross monthly household income not exceeding :- - $10,000@ for families* - $15,000@ for extended families* - $5,000@ for singles buying a 5-room or smaller resale flat under Single Singapore Citizen (SSC) scheme And submit HLE applications from 15 Aug 2011 onwards for the following categories of transactions:
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(c) | have not previously taken two or more HDB concessionary interest rate loans; | ||||||||
(d) | do not own any private residential property^ in Singapore or overseas; | ||||||||
(e) | have not disposed off any private residential property^ within 30 months before the date of application for HDB Loan Eligibility (HLE) and have never taken any HDB concessionary interest rate loan; | ||||||||
(f) | do not own more than one market / hawker stalls or commercial / industrial property in Singapore or overseas; | ||||||||
(g) | own one market / hawker stall or commercial / industrial property and operate the business yourself#; |
@ If the applicants and occupiers are unemployed for fewer than 3 months, the average income will be computed based on the number of actual months he/she has worked.
*Not applicable for HDB concessionary loan to buy DBSS flat. The income ceiling remains at $8,000 / $12,000 ( extended family). Households with monthly income of $8,001 to $10,000 will not be eligible for an HDB concessionary loan to buy a DBSS flat.
^ Private residential property include HUDC flat / Executive Condominium.
# Not applicable for owners who have other sources of income.
You can also use the enquiry facilities below to check if you are eligible for an HDB concessionary loan.
IMPORTANT NOTE:
By accessing and using this Facility or any part of this Facility, and the information provided under this Facility ("Facility"), you are deemed to agree to the Terms and Conditions and Privacy Statement set out here.
To proceed with your enquiry, you can:
- Complete an online questionnaire for quick results; or
Let us guide you through the process to apply for an HDB Housing Loan:-
When To Apply
Cut-off Dates
HDB flat buyers / transferees who wish to obtain an HDB concessionary loan, must have a valid HDB Loan Eligibility (HLE) Letter before exercising an Option to Purchase a new flat from HDB, a resale flat or when applying to take over ownership of an existing flat.
The cut-off dates for different types of transactions for the purchase / transfer of a flat and the due date to obtain the HLE letter are summarised in Table 1 :
Table 1: Cut-Off dates for HLE Letter
Type | Cut-off dates for cases which require HLE letter |
| Purchase of New Flats from HDB | |
| Completed / Uncompleted flat (under the Walk-In Selection, the Balloting Exercise and Build-To-Order System) | Booking of new flats on or after 1 Jan 2007 * |
| Purchase of Resale Flats | |
| Purchase of resale flat with / without CPF housing grant | Resale application received on or after 1 Jan 2007 * |
| Taking over ownership of existing flat | |
| Taking over ownership of existing flat | Application to take over the flat ownership by transfer received on or after 1 Jan 2007 |
| Purchase of SERS Replacement Flat | |
| Purchase of Replacement flat by SERS flat owners | Booking of replacement flats by SERS flat owners at SERS sites^ announced on or after 1 Jan 2007 |
| Purchase of flats under Design, Build & Sell Scheme | |
| Flats developed by the private developer and sell under the Design, Build & Sell Scheme | Booking of DBSS flats on or after 1 Jan 2007 |
* HLE must be obtained before date of exercise Option To Purchase and it must still be valid on the date they exercise the Option To Purchase.
^ This includes application for resale / transfer of SERS flat. For SERS sites announced before 1 Jan 2007, the HLE letter is not required.
Validity of HLE Letter
The HLE letter will be valid for 3 months from the date of issue. There is no need for re-assessment within the 3 months period as long as the buyers and intended occupiers remain the same.
For uncompleted flats, where the purchasers will only obtain physical possession of the flat a few years after the date of selection, we will reconfirm your loan eligibility before disbursement of the loan to check that there is no change in your financial ability to service the loan.
Revocation of HLE Letter
The HLE Letter will be revoked if:
| (a) | there is a change in buyers and /or occupiers; |
| (b) | the buyers and / or occupiers become ineligible for an HDB concessionary loan e.g. they purchase any private property; or |
| (c) | the buyers give any information which is untrue or incorrect in the application for the HLE Letter. |
You can use the enquiry facilities below to apply for an HDB Loan Eligibility Letter
IMPORTANT NOTE:
By accessing and using this Facility or any part of this Facility, and the information provided under this Facility ("Facility"), you are deemed to agree to the Terms and Conditions and Privacy Statement set out here.
To proceed with your enquiry, you can:
Let us guide you through the process to apply for an HDB Housing Loan:-
How To Apply
Application for HDB Loan Eligibility Letter
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| * | The HLE letter must be valid at the time you exercise the Option To Purchase. |
| HLE Letter is valid for 3 months. | |
| Need to re-apply if HLE Letter has expired. |
HDB Loan Eligibility (HLE) Letter for loan eligibility and quantum
To obtain an HLE Letter or request for a written confirmation from HDB on the maximum loan quantum you are eligible for, please click here.
You are required to submit your income certification and other supporting documents to HDB within 7 days after the request date.
You may wish to check the following before applying for an HDB Housing Loan:-
What To Note
HDB Loan Eligibility (HLE) Letter
If you wish to get an HDB loan, you will need to first obtain an HDB Loan Eligibility (HLE) letter.
Credit Assessment
The amount of housing loan that can be granted will depend on the buyers’ age and monthly income. If you are buying an uncompleted flat directly from HDB, your loan eligibility will be subject to reassessment at the time of flat completion before the loan is disbursed.
Maximum Loan Quantum
The maximum loan amount that may be granted depends on:-
(a) maximum repayment period;
The maximum loan repayment period is 65 years minus the buyer’s age or 30 years, whichever is shorter.
(b) applicable interest rate;
Computation of the maximum loan will be based on the prevailing interest rate which may be revised from time to time. The interest on the HDB loan will be computed on a monthly rest basis or such other basis as the HDB may decide.
(c) monthly instalments; and
This is capped at 40% of the gross monthly income.
(d) loan ceiling.
The loan that can be granted for the purchase of an HDB flat is subject to:
| Sales Type | Loan Ceiling* |
| Direct purchase flats | 90% of the purchase price |
| Resale flats | 90% of the resale price or 90% of the market value, whichever is lower |
*If you have selected your flat before 19 Jul 2005, your loan ceiling is capped at 80%.
Gross Monthly Income
Credit assessment will be conducted based on the buyers' age and income to compute the amount of housing loan you can obtain. Please click on the Income Guidelines for Credit Assessment to check the types of income which will be considered in HDB's credit assessment.
Right-sizing the quantum for the second concessionary HDB loan
To further encourage financial prudence, HDB will reduce the quantum of the second concessionary loan by the full CPF proceeds and part of the cash proceeds from the disposal of the existing or immediate past HDB flats. HDB reserves the right to determine the amount of proceeds to be deducted, depending on the existing / immediate past flat's manner of holding or the provisions of any court order relating to the disposal of the flat (where applicable). HDB will determine the proceeds to be deducted, taking into account the provisions of the court order, without reference to the manner of holding of the existing / immediate past flats. Flat buyers can keep the greater of $25,000 or half of the cash proceeds (including the cash deposit received), HDB will take into account the remaining part of cash proceeds when determining the quantum of the second loan to be granted.
Manner of disposal of existing or immediate past HDB flat includes by way of sale, transfer, surrender or compulsory acquisition.
The cut-off dates for different types of flat transactions whereby the amount of the second HDB concessionary interest rate loan will be reduced by the CPF and cash proceeds from the disposal of existing flat / immediate past flat sold are summarised in Table 1:
Table 1: Cut-Off dates for utilisation of sales proceeds before granting second HDB concessionary interest rate loan
Transaction Types | Cut-Off Date |
Purchase of New Flats or DBSS Flats | Date of booking of flat and HLE Application received by HDB on or after 5 Mar 2010 |
Purchase of Resale HDB Flats | Date of HLE Application on or after 5 Mar 2010 |
Purchase of Replacement Flats Under SERS | Date of HLE Application by SERS flat owners for new SERS sites announced on or after 5 Mar 2010 |
For buyers and essential occupiers who have taken one HDB concessionary interest rate loan and buy the next HDB flat after disposing the existing one
For those who buy the next flat after disposing the existing one, they will have to use part of cash proceeds from the disposal of the immediate past HDB flat and all of the CPF balance to finance the purchase of the next flat.
For buyers and essential occupiers who have taken one HDB concessionary interest rate loan and buy the next HDB flat before disposing the existing one
Those who buy their next flat before disposing the existing one, HDB will first grant them a loan at commercial interest rates (which are pegged to the 3-month average non-promotional interest rate for HDB flats offered by the 3 local banks) after they draw down their CPF balance. After the disposal of their existing flat, they will have to redeem this loan with the full CPF refund from disposal of the existing flat and part of the cash proceeds. Upon redemption, the loan will be converted to a concessionary rate loan.
Use of All CPF Savings
Buyers must use all the available savings in their CPF Ordinary Accounts [after reserving an amount required for payment of stamp, registration and conveyancing fees and CPF Home Protection Insurance Premium (if applicable)] for the purchase of or taking over the flat before any housing loan is granted by HDB.
You can use all the CPF savings in your Ordinary Account to pay up to 100 % Valuation Limit (VL) of the flat. The VL refers to the purchase price or the value of the flat at the time of purchase, whichever is lower. If your HDB loan is still outstanding when the total CPF withdrawals towards payment of the flat reach the VL, you may use additional CPF savings from your Ordinary Account if you have set aside the prevailing Minimum Sum cash component.
For more details on the limits or to find out if you are affected by CPF Board’s Minimum Sum Scheme, you can visit CPF Board's website.
Restriction on application for another HDB loan
Upon obtaining a housing loan from HDB, buyers will not be allowed, within 30 months from the date of loan disbursement of the flat, to obtain another housing loan from HDB.
Interest Rate
The HDB concessionary interest rate is pegged at 0.1% point above CPF Ordinary Account Interest Rate. It is revised quarterly in January, April, July and October each year, in line with the revision of CPF interest rate.
Repayment of HDB Loan
You can use your CPF savings and /or cash to service the monthly instalments of the housing loan. The monthly instalment is payable on the first day of each month. If the instalment is not paid within the month, a late payment charge will be imposed based on the outstanding instalment as at end of the month. Any payment received by HDB will first be used to settle the outstanding late payment charges. Any balance will then be applied towards the payment of the other outstanding charges.
Buyers paying the monthly loan instalments partially or fully by cash, must pay them through GIRO.
Progress Payment [Applicable for flats sold under the Design, Build and Sell Scheme (DBSS)]
Where the developer offers progress payment to buyers, the HDB loan will be disbursed progressively to meet the progress payments during the construction period. Buyers will commence payment of their monthly instalments once the HDB loan is disbursed under the Gradual Repayment Plan i.e. the instalments will be calculated based on the amount of loan disbursed over the outstanding loan duration. The instalment amount will comprise both interest and principal.
Existing flat owners with a mortgage loan will have to continue to service their existing loan while making payments for the new loan for a DBSS flat once the loan has been disbursed.
If existing flat is disposed after the buyer has taken possession of the DBSS flat, where HDB housing loan has been fully disbursed, the loan quantum will be reduced taking into account the CPF refund and cash proceeds realised from the flat.
In a situation where existing flat is disposed in the midst of the construction of DBSS flat (where monthly instalment is still being paid according to the Payment Schedule), the buyer has to use the sales proceeds to redeem whatever loan that has been disbursed towards the progress payment and use the balance proceeds towards payment of subsequent progress payments. Developer can take action on the buyer for non-payment. HDB would only start to disburse the net loan after the buyers’ CPF refund and cash proceeds have been exhausted, in accordance to the payment schedule.
After booking the DBSS flat, while waiting for the DBSS flat to be completed, in addition to the HDB loan obtained for the DBSS flat, the DBSS flat buyer may wish to get a 2nd HDB concessionary loan to buy another resale flat for transitional housing. Upon disposal of the resale flat, CPF refund and up to 50% of the cash proceeds from the disposal of the resale flat must be used to reduce the DBSS loan.
Partial Capital Repayment and Redemption of Loan
The buyers/transferees can from time to time submit an application to HDB to make partial capital repayment of the Principal Sum (over and above the monthly instalments to be paid) provided such payment is made within one (1) month from the date of receipt of the said application. Notwithstanding the foregoing HDB reserves the right not to accept any such payment or to accept such payments only if it is of a sum of not less than a minimum sum as may be determined from time to time by the HDB in its discretion.
Buyers can also fully redeem the loan by giving one month’s prior written notice to HDB . For redemption after complete disbursement of loan, the buyer should pay the whole of the Principal sum then outstanding and all other monies due including interest up to the date of payment.
Insurance on Housing Loan
| There are two types of insurance you have to take out: HDB Fire Insurance Policy If you are taking a loan from HDB, you will have to take out a fire insurance policy from the Insurance Agent appointed by HDB. Home Protection Scheme (HPS) HPS is a mortgage-reducing insurance scheme administered by CPF Board. It insures CPF members and their families against losing their homes should members become permanently incapacitated or pass away before their housing loans are paid up.If you are using your CPF savings to pay your monthly housing loan instalments, you have to apply for HPS. For more information on HPS, you can obtain an HPS booklet at HDB Hub or call CPF Board or visit the CPF Board's website. Bank Housing Loan Since 1 January 2003, flat buyers who are not eligible for an HDB loan will have to take a loan from bank/financial institution that is licensed by the Monetary Authority of Singapore to provide housing loans. HDB flat purchasers / transferees are advised to check with the banks / financial institution on the granting of such housing loans. For those taking bank loans, a Letter of Offer must be obtained from the banks / financial institutions before you exercise the Option to Purchase for the HDB flat. You can check HDB Housing Loan > Who can Apply whether you are eligible for an HDB housing loan. For the recent update on bank loan, you can check here. Where To Obtain A Bank Housing Loan You can consult any banks to help you determine the amount of loan which you can obtain based on your current income. A list of all the banks can be found in the Monetary Authority of Singapore (MAS) website: When you are considering taking up a loan with the bank, ask for a Customer Information Sheet and spend time to study the different loan packages available. Useful Information from Association of Banks in Singapore (ABS) and Moneysense The Association of Banks in Singapore (ABS) promotes and represents the interests of the banking community in Singapore. To help consumers understand money and debt management matters, the Association worked with the major retail banks as well as CASE and Moneysense in producing the following:
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Ref:hdb.gov
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