Steps To Buy Resale HDB Flat in Singapore
Table of Contents
- Step 1: Check Eligibility & Apply for HFE Letter
- Step 2: Plan Your Finance
- Step 3: Search for a Suitable Flat
- Step 4: Obtain Option to Purchase (OTP) from Seller
- Step 5: Submit Request for Value to HDB
- Step 6: Convert IPA into a LO
- Step 7: Exercise OTP
- Step 8: Submit Resale Application
- Step 9: Accept Resale Application
- Step 10: Attend Completion Appointment
Step 1: Check Eligibility & Apply for HFE Letter
Eligibility
Before you can buy a resale flat, there are specific eligibility criteria you must meet:
- For Singles, applicants must be a Singaporean citizen. For couples, there should at least be one Singaporean Citizen or a Singaporean Permanent Resident with at least 3 years of residency.
- Applicants should be 21 years old and above if buying in an approved family nucleus. If single, widowed or divorced, they must be at least 35 years old.
- The flat must be within the Ethnic Integration Policy and Singapore Permanent Resident quota for the block or neighbourhood.
- Applicants should not own any other residential property locally or overseas, nor should they have disposed of any such property within the last 6 months before the resale flat application.
Make sure to check the specific eligibility requirements on the HDB website to ensure you qualify before proceeding.
HDB Flat Eligibility (HFE) Letter
To process your application for buying a resale flat, you should submit an HFE Letter to the HDB on the My Flat Dashboard. This letter is a crucial document that details your eligibility for an HDB loan and the maximum loan amount you can borrow. It also provides clarity on your budget, helping you make informed decisions about the flats you can afford to buy.
How to Apply for an HFE Letter
Preliminary Check
- Login to the HDB Flat Portal using your Singpass
- Enter the particulars of all flat applicants and occupiers
- Declare any interest in local or overseas private property
- Indicate whether you intend to take up a housing loan
From the information you have provided, you will receive an instant preliminary outcome. This will determine your eligibility for a resale flat purchase, CPF grants and an HDB housing loan.
Applying for an HFE Letter (After 30 days of starting Step 1)
- Choose a housing loan option
- Give all the necessary information before the due date
- Review and confirm your application details
Receive Your Results
- Generally, you can receive your letter within a month, but it may take longer if you apply during peak periods. You will then be notified through SMS when your letter is ready for viewing on the HDB Flat Portal.
The validity of the HFE letter is usually nine months, ensuring that the information remains current and relevant to your HDB resale property search.
Step 2: Plan Your Finance
When buying a resale HDB flat, understanding your financing options is crucial to ensure you make informed decisions that suit your financial situation. Here are the key options to consider:
Financing Option | Downpayment | Interest Rate | Loan Tenure | Eligibility |
HDB House Loan |
| Currently at 3.0% per annum | Typically capped at whichever is the shortest:
|
|
House Loan from Financial Institutions (FI) |
| Varies based on market conditions and the bank’s terms, often higher than HDB loans. | Typically up to 30 years | Based on the FI’s assessment of your financial status and credit score. |
CPF Housing Grants for HDB Resale Flats
In addition to loans, eligible applicants can benefit from CPF Housing Grants, which can provide up to S$80,000 for families to help with the purchase of a resale flat. For Singles, the subsidy will be S$40,000 for a 2- to 4-room resale flat or S$25,000 for a 5-room resale flat.
The eligibility for housing subsidies depends on the core family nucleus, which consists of the applicants and occupiers who enable the household to meet the eligibility requirements for the flat purchase. They must remain in the flat application and during the minimum occupation period (MOP) after the flat purchase.
Eligibility Requirements
- The applicant must be a Singaporean citizen, or there should be at least one other Singaporean Citizen
- Applicants must be at least 21 years old.
- At least one of the core applicants or core occupiers must be a first-time recipient of the housing grant.
- The household’s monthly income should not exceed S$7,000 for singles, S$14,000 for families or S$21,000 for extended families.
- Applicants should not own or have an interest in any local or overseas property.
- Applicants should not have disposed of any private property within the last 30 months before the legal completion date of the HFE letter application.
Step 3: Search for a Suitable Flat
With your HFE letter in hand, you can start searching for a suitable resale HDB flat to buy. During this process, you should take the time to research what you are looking for in a flat. Make sure to define your needs and preferences to streamline the search process. Here are some key aspects to consider:
- Size: Determine the size of the flat that suits your family’s needs. Consider the number of bedrooms, bathrooms, and overall living space.
- Budget: Set a clear budget based on your HFE letter and financing options. Factor in additional costs such as renovation, moving expenses, and monthly maintenance fees.
- Location: Choose a location that aligns with your lifestyle and daily needs. Consider proximity to your workplace, schools, public transport, and amenities like supermarkets and healthcare facilities.
- Amenities: Look for flats in neighbourhoods with amenities that enhance your quality of life. This includes parks, recreational facilities, malls and restaurants.
- Future Development: Research any upcoming developments or infrastructure projects in the area that could impact property value and living conditions.
Once you have a clear idea of your requirements, start visiting potential HDB resale flats. During viewings, take note of the condition of the flat, the layout, and any immediate renovation needs. It’s helpful to take photos and notes for comparison later. Should you need additional help, AE Realtor can assist you in this search, offering expert advice and insights to find a flat that meets your needs and preferences before taking the step to buy one.
Step 4: Obtain Option to Purchase (OTP) from Seller
Once you’ve found a flat you wish to buy, the next step is to obtain an Option to Purchase (OTP) from the seller. The OTP is a legally binding agreement between you and the seller, giving you the exclusive right to buy the HDB resale flat within a stipulated period. To obtain an OTP, you’ll need to pay an option fee, which is part of the purchase price. You can negotiate the amount for the Option Fee and the Option Exercise fee with the seller and it will form part of your payment. Typically, the Option Fee can range from S$1 to S$1,000 in cash, and the Option Exercise Fee is any amount that must not exceed S$5,000. It’s worth noting that your Option Fee is non-refundable, so it’s essential to be sure of your purchase before the seller registers their Intent to Sell.
The OTP process also includes finalising your financing options, for which you have two main choices. Each option has its own specific requirement:
- Option 1: HDB Loan – Obtain the HFE letter.
- Option 2: Bank Loan – Secure a Letter of Offer (LO) from a financial institution.
While applying for the HFE letter through the My Flat Dashboard on the HDB website (refer to Step 1), you have the opportunity to request an In-Principle Approval (IPA) and a LO concurrently from participating financial institutions. This simultaneous application can streamline the process, allowing you to compare your options between an HDB loan and bank loans more efficiently.
Step 5: Submit Request for Value to HDB
After obtaining the OTP, you need to submit a Request for Value to HDB. This request is necessary to determine the official valuation of the flat, which is crucial if you’re using CPF funds or a loan to finance the purchase. The valuation will also affect the amount of CPF funds you can use and the size of the loan you can obtain. The buyer usually bears the cost of this valuation, and the valuation report is valid for a limited period.
Step 6: Convert IPA into a LO
If you have previously requested an In-Principle Approval (IPA) together with your application for the Home Financing Eligibility (HFE) letter, it’s time to convert the IPA into a Letter of Offer (LO). This should be done before you exercise the Option to Purchase (OTP) within the designated Option Period.
Step 7: Exercise OTP
Exercising the OTP is the step where you formally agree to buy the HDB resale flat. To do so, you must pay the option exercise fee in addition to the option fee already paid.
Once you decide to exercise the OTP, you must complete the necessary paperwork, which includes signing the acceptance of the option. This process also involves finalising your financial arrangements, such as confirming your loan details and ensuring that you have the necessary funds for the down payment and other related costs. Conversely, if you choose not to proceed, you can let the OTP lapse, but you’ll forfeit the option fee paid earlier.
Step 8: Submit Resale Application
Then, you and the seller should submit a resale application to HDB. This application is a formal request to transfer the ownership of the flat from the seller to you. It must include detailed information about both the buyer and the seller, the flat, and the terms of the sale. Both you and the seller should submit your respective portions of the resale application and the necessary supporting documents through the My Flat Dashboard.
It’s crucial to be mindful of the timeline for submission and ensure that all required information is accurately provided. Discussing the timeline with the seller can help streamline the process and avoid any delays in the buying process.
The fee for the resale application varies depending on the type of flat you plan on buying. For 1- and 2-room HDB flats, the fee is S$40 while 3-room and bigger is S$80.
By ensuring all documentation is complete and submitting the application within the stipulated time frame, you can facilitate a smooth transition of ownership.
Step 9: Accept Resale Application
Once the resale application is submitted, HDB will review it to ensure all requirements are met and that the transaction complies with their regulations The review process for your resale application will be completed within a period of 28 working days. Within this timeframe, you will receive notification from HDB regarding the verification of your eligibility and the acceptance of your resale application.
HDB will arrange and provide all the required documents for both you and the sellers to sign, which should be prepared approximately three weeks following the acceptance of the application. It is essential for both you and the sellers to review, acknowledge, and sign these resale documents, as well as settle any applicable fees.
Upon successful endorsement of fees and payment of fees, HDB will issue an in-principle approval for the resale transaction. This approval is a significant milestone, as it indicates that HDB has accepted your application and that the resale process can proceed.
Step 10: Attend Completion Appointment
The final step in the buying process is attending the completion appointment with HDB. This appointment typically takes place around eight weeks after HDB’s acceptance of the resale application. The completion appointment is a critical event where the official transfer of ownership of the flat takes place.
During the appointment, you will finalise the purchase of the resale flat by signing the necessary documents, including the transfer document and mortgage agreement, if applicable. You will also need to make the final payment for the flat, which may include the balance of the purchase price and any other fees associated with the transaction.
Attending the completion appointment is the culmination of the HDB resale buying process, marking the moment when you become the official owner of the flat. It’s essential to be well-prepared for this appointment, ensuring that all financial arrangements are in place and that you have all necessary documents ready.
Find Your Dream Resale HDB
Buying an HDB resale flat in Singapore can be a complex process, especially for first-timers. However, when you fully understand each step, it can make each procedure more manageable and straightforward.
Should you need expert assistance, AE Realtor is here to assist you in finding the perfect resale flat that fits your needs and preferences. Andy leads the team at AE Realtor and brings a wealth of experience and expertise to the table. With over 10 years of experience in managing a business prior to joining the real estate industry, he possesses the qualities and skills essential for guiding clients through their asset progression journey.
In addition to our expertise in the HDB resale buying process, AE Realtor is also well-versed in helping clients purchase Executive Condominiums (EC) and providing information on upcoming EC projects. With our help, you can learn more about the requirements for eligibility to buy an EC and identify which ECs in Singapore can fit your budget and lifestyle.
Navigate the property-buying process with confidence and ease by partnering with AE Realtor.