There’s hardly anyone who can claim not to have the desire to own his own house. Indeed, this is the most cherished dream of most people out there. And Singapore government is committed to making this dream more accessible for its residents. Yes, purchasing resale HDB can enable you to buy your very first home.
But there are some things you must keep in mind. Although the process is fairly simple, there is a lot you will have to consider when buying a resale HDB. And this can be an overwhelming experience especially when you are purchasing a property for the first time. So, it is vital to know how to go about the whole thing beforehand. This will ensure that you know exactly what you are getting into.
Steps To Buying Resale HDB: Everything You Should Know
Home buyers primarily have two options for buying a property first time. They can purchase a resale flat available on the open market, and use housing grants and loans to manage the finances. Or they can buy a flat directly from HDB, making the most out of the subsidized rate.
The government has ensured that the ownership of an HDB is not out of reach for the masses. Hence, it has provided generous subsidies and CPF housing grants. This is primarily how most of first-time home buyers are able to buy their flats from HDB.
Want to find out how you can buy a resale flat from HDB? Let’s dig deep!
Step 1: Figure Out Your HDB Scheme
Depending on various factors like your household income, the type of flat you are interested in, and so on, you can get up to $160,000 in housing grants if you decide to buy a resale flat! To figure out how much housing grant you can get for your HDB, you have to determine the HDB scheme applicable to you.
- Public Scheme – Under this scheme, you will need to form a family nucleus with either of the following:
- Parents and siblings
- Spouse and children
- Children under your legal custody, care and control
- Fiancé/Fiancée Scheme – This scheme is for people who wants to buy a resale HDB flat with their fiancé. Submission of your marriage certificate is required within 3 months from the legal completion of your HDB flat.
- Single Singapore Citizen Scheme – This scheme is for those single above 35 years old and yet to be married, divorced or widowed at the point of purchase.
- Joint Singles Scheme – This scheme applies to those singles aged 35 years and above who want to share the space with their friends who are also single.
- Non-Citizen Spouse Scheme – This scheme works for those people whose spouse is a foreigner.
And it is not only the schemes that you will have to think about. There are some other eligibility conditions to consider too.
- Your income ceiling matters. Even though there is no income ceiling for buying a resale HDB. But your current income will influence on the amount of housing grants given and your eligibility to get a HDB loan.
- Having another property (Be it HDB, local private or oversea property) In case you or the person with whom you are buying the resale flat has another property, you will have to dispose it within six months of purchasing the resale flat.
Step 2: Check Your Finances
Naturally, there is no fixed price to buy resale HDB. This varies from seller to seller. But you will definitely need to plan your finances, so you don’t end up being having your deposit forfeited. As resale prices can be significantly high in some locations, so you must plan well financially to make sure that the purchase is within your affordability.
Before you decide to place your deposit for the resale HDB that you want to buy, do make sure that you already have your loan approved either from HDB or bank. In order to be eligible for HDB loan, you need to meet the below criteria:
| HDB Loan Eligibility | ||||
| Household Status | Have not taken more than 2 housing loans previously | |||
| Monthly Household Income Ceiling | Family Scheme: $14,000 | Extended Family Scheme: $21,000 | Single Scheme: $7,000 | |
| If you exceed the household income ceiling, you will need to apply for bank loan | ||||
| Ownership of local private property | If you are 55 years and below, you have to wait for 15 months after selling your private property (based on the latest cooling measures on 30 September 2022) before you are allowed to buy resale HDB. | |||
| Ownership of overseas property | You need to dispose your overseas property within 6 months after possession of your resale HDB. | |||
Once you have secured your loan, you are ready to place a $1,000 deposit for the resale HDB that you intend to purchase.
| Types of Payment Made for Purchase of Resale HDB | ||
| Booking Fee | $1,000 (In exchange for Option to Purchase) | |
| Booking Deposit | $4,000 (Exercise the OTP within 21 days from Option Date) | |
| Total Deposit to Seller | $5,000
(This amount will be deducted from the sale price) |
|
| HDB Loan | Bank Loan | |
| Initial Downpayment | 20% – CPF OA/Cash | 5% – Cash
20% – CPF OA/Cash |
| Covered by Loan | Up to 80% of Purchase Price | Up to 75% of Purchase Price |
| Cash Over Valuation | If the offered price is higher than the valuation, the difference is the Cash Over Valuation, which needs to be paid in cash at completion. | |
There are some other expenses you will have to bear along the way too. This includes:
- Buyer’s stamp duty (Purchase price x 3% – $5,400) – Payable through CPF OA
- Additional buyer’s stamp duty (if you are permanent resident) – Payable through CPF OA
- Valuation fee
- Resale application fee
- HDB conveyancing fee (if taking HDB loan) – Payable through CPF OA
- Legal fee (if taking bank loan) – Payable through CPF OA
So now you know why it is vital to plan your finances beforehand. Because even with the grants and loans, buying resale HDB need some careful financial planning
Step 3: Using CPF To Pay for The Resale HDB Flat
Very few people have so much cash on hand to fully paid your resale HDB especially when it is your first property. This is why your CPF savings comes in handy right now.
So how does CPF saving work?
Basically, if the lease of your resale flat can cover the youngest buyer until the age of 95, you can use 100% of your CPF to pay for the property till the valuation limit of the property is reached. If that’s not the case, you will have to use a bank loan or cash to pay for the flat.
There are many expenses of HDB flats that you can pay using your CPF account. These include the initial payment and partial or full payment for the flat. You can also use your CPF savings to make your monthly mortgage instalments or to pay for your legal fees. The account can also be used to cover your stamp duties.
To sum it up, CPF savings can reduce your financial burden of buying a resale HDB for the first time to a great extent.
The Housing Grants for HDB
Apart from the CPF account, there’s another way to ease the financial burden, and that is by using the grants given by the government if you are eligible.
In a nutshell, there are 3 housing grants that you can receive when buying resale HDB:
- Family Grant
- Enhanced Housing Grant
- Proximity Housing Grant
| Type of Housing Grants for Resale HDB | |||
| Type of Grant | Amount | Income Ceiling | Eligibility |
| Family Grant | $80,000 (2-4RM) | – Up to$14,000
– Extended Family: Up to $21,000 |
Married/engaged couple or family who are 1st timer |
| $50,000 (5RM or larger) | |||
| Enhanced Housing Grant | Up to $80,000 | Up to $9,000 | Last 12 months of working and still working at the point of application |
| Proximity Housing Grant | $20,000 if within 4 km to parents or children | – | Make sure no Proximity grant is taken before |
| $30,000 if living with children or parents in the same resale flat | – | ||
| Type of Housing Grants for Resale HDB (For Single/Joint Singles) | |||
| Type of Grant | Amount | Income Ceiling | Eligibility |
| Family Grant | $40,000 (2-4RM) | Single – Up to $7,000
Joint Singles – $14,000 |
At least 35 years old
1st timer |
| Single – $25,000 (5RM)
Joint Singles – $40,000 (2-4RM), $25,000 (5RM or larger) |
|||
| Enhanced Housing Grant | Up to $40,000 | Up to $4,500 | Last 12 months of working and still working at the point of application |
| Proximity Housing Grant | $10,000 if within 4 km to parents or children | – | Make sure no Proximity grant is taken before |
| $15,000 if living with children or parents in the same resale flat | – | ||
Time To Get Started
- Ok great! By now, you have a good understanding on the cost involved and how to plan your finances ahead. What next? Fortunately, you have crossed the most challenging part, so the way ahead is going to be a whole lot simpler.
You can engage the professional service of a real estate agent to help you find your dream home. He/she will help you with:
- Sourcing for your ideal home
- Handle all the price negotiations on your behalf
- Submission of paperwork to HDB
- Key collection at completion
Alternatively, it is pretty common for buyers to Do-it-Yourself the whole process these days too. Below is the overview of the whole process of buying a resale HDB flat:
| Overview of The Buying Process for Resale HDB | |
| 1. | You need to register your Intent to Buy a resale HDB |
| 2. | Secure your loan from HDB or bank |
| 3. | Place $1K as booking deposit in exchange for Option to Purchase (OTP) |
| 4. | Apply for valuation request |
| 5. | Pay another $4K as exercise fee within 21 days from the OTP date |
| 6. | Submission to HDB for resale application |
| 7. | HDB request to endorse documents online |
| 8. | Receive approval from HDB on your resale application |
| 9. | Pay the required fees (eg: stamp duty, HDB conveyancing fee etc) online |
| 10. | HDB will send you the resale completion date to take keys |
That’s it! Your work is done.
Get The Perfect Resale HDB As Your First Home
There are plenty of options out there. Understand your needs and wants first. Always remember that if this is your first time buying a property, this will not be your retirement home especially when you are still young. Rather, this is the beginning of your asset progression journey.
Jimmy Sum is a professional real estate agent in the Singapore property market with more than 10 years of experience. If you need any professional advice on your asset progression journey or need some assistance in selling, buying or renting your property, you can feel free to send him an Whatsapp at +65 90918188.
