Thinking of applying for a BTO flat but don’t know where to start? Here is a step-by-step guide on the process, where we highlight the things you should note and share tips for each stage of the application process.

Step 1: Sales launch

BTO flats are available for application quarterly. HDB will announce the exact application period on the day of the sales launch. So, be sure to follow MyNiceHome, to get first-hand details of the projects on offer!

You can also check out the HDB Flat Portal and HDB social media channels (HDB Facebook, MyNiceHome Facebook, Instagram & Telegram). In a typical sales launch, several projects will be launched and applicants will have one week to submit their application.

During a sales launch, you will see a banner (like the one pictured below) on the HDB Flat Portal. Click on it and it will lead you to a listing page with prices and information on the projects on offer. Be sure to go through the details and discuss the options with your spouse or co-applicant!

Pro tip: Plan your flat purchase by checking out the HDB Flat portal in advance. The portal lists BTO projects about 3 months ahead of the projects’ scheduled launch and you can find useful information such as the site map, flat types and number of units offered for each project.

Step 2: Check eligibility

Found a flat that you like? Check your eligibility before making an application. You can read the eligibility conditions below and visit HDB InfoWEB for more details.

Overview of eligibility conditions

You should also ensure that you have sufficient funds to purchase the flat. Previously, this might involve visiting several websites and webpages, but HDB has made it easier by streamlining the information-gathering process on the new HDB Flat Portal. You can now work out the sums easily with the calculators on the Portal.

Step 3: Submit application

When submitting an online application, applicants will have to pay a non-refundable application fee of $10 via MasterCard/VISA. You have one week to submit your application, but there’s no need to rush as applications are not processed on a first-come-first-serve basis.

At the close of the application period, HDB will process the BTO applications using a computer ballot. This will determine your queue position to book a flat.

Pro tip: You can improve your chances by applying under one of HDB’s Priority Schemes. Also, read this guide on using the HDB Flat Portal to submit your BTO flat application.

Step 4: Receive application outcome

HDB will notify you via SMS, and/or email, on the outcome of your ballot in approximately 3 weeks after the close of application.

Pro tip: You can also visit HDB InfoWEB or log on to My HDBPage to check your application status.

Step 5: Book flat

If your application is successful, you will be invited to book a flat from 4 weeks after the release of the ballot results. Before you head down to HDB Hub at Toa Payoh for your appointment, be sure to have the required documents ready.

During the selection appointment, you will need to pay an option fee – this will form part of your downpayment for the flat purchase. The amount payable varies depending on the flat type. Payment has to be made via NETS.

If you are applying for the Enhanced CPF Housing Grant, you will need to submit the application form during the appointment.

Pro tip: With the new HDB Flat Portal, you can create a watchlist of your preferred units and receive notifications if and when they have been booked by others.

Step 6: Sign Agreement for Lease

From 6 months after booking your flat, HDB will invite you to sign the Agreement for Lease. Ensure that you have the necessary documents with you.

This includes a valid Home Loan Eligibility Letter (HLE) from HDB if you are taking an HDB housing loan, or a Letter of Offer if you are taking a housing loan from a financial institution (FI).

You would also need to make a downpayment for your flat. The amount depends on the type of loan you are taking. For HDB Loan, it is 10% of the purchase price and it can be fully paid for using the CPF funds in your CPF ordinary account.

For a loan from an FI, it is 20% of the purchase price, of which at least 5% must be paid using cash and the remaining can be paid using your CPF savings.

As the maximum loan quantum granted by financial institutions is 75% of the purchase price, you will have to pay the balance 5% of the purchase price using cash or CPF savings when you collect the keys to your flat. The actual cash quantum would depend on the maximum loan ceiling.

For payment using CPF savings, you would need to access your Singpass and your mobile phone or OneKey token for 2-factor authentication. The registration for Singpass and activation of 2FA will take up to 10 working days. So be sure to prepare these in advance!

Pro tip: There are several factors to consider when deciding between an HDB housing loan or a loan from an FI. Check out this article to compare the differences between the two financing options.

Step 7: Collect keys to flat

When construction of your flat is completed, HDB will notify you to make a trip to its office to collect the keys to your flat. The key collection process is straightforward and you will be guided by experienced HDB officers. Have the necessary documents with you, collect your keys and congratulations on becoming a home owner!

Pro tip: Planning for your home renovation is a creative process which takes time! Start early with this Guide to Planning Your HDB Home Renovation.

Mr and Mrs Loi were one of the first few families who moved to Punggol in 2003. After 18 years, having witnessed Punggol develop from a sleepy town into a bustling one, they moved to Bidadari to be close to family. The couple, both in their 60s, decided to purchase an HDB BTO Flat the same time as their son, Francisco, and daughter-in-law, Adora under the Multi-Generation Priority Scheme (MGPS).

Hello Mr and Mrs Loi, congratulations on your new home. How do you find it here?

Bidadari is very green and tranquil despite being close to many amenities, such as the shopping malls at Potong Pasir (Poiz) and Serangoon (NEX). There are also several eating places around the estate, so we will not run out of food choices! Like Punggol where we used to live, there are many covered linkways and ramps that make it easy for us to explore the estate—such as playgrounds— with our grandchildren.

How did you hear about MGPS?

We did not know about this scheme until our son asked us to apply for an HDB BTO flat together – as parents with their married child. He was considering Bidadari for its location and proximity to 2 MRT stations (Potong Pasir and Woodleigh), which makes getting around more convenient. We read up about the BTO project and were convinced when we saw that there will be a lot of greenery and a lake, as we wanted to live somewhere close to nature like Punggol!

Eventually, we applied for a 3-room flat and our son, a 4-room flat. It was a unique family bonding experience as we got to celebrate the different flat buying milestones together, such as being nervous about getting a ballot number, as well as the excitement during flat selection and key collection!

Can you describe your moving in process?

As our son helped us oversee the renovation, our ‘job’ was mainly to decide and buy the home appliances early so that he can make sure that that everything fits into the space and design. We also chose materials that are easy to clean and maintain. For example, we use KompacPlus for our kitchen as we are heavy cookers and the material prevents water marks and stains.

What do you love most about your new home?

We appreciate the layout of our current HDB BTO flat more, even though our current 3-room flat is smaller than our previous 4-room flat. There is more airflow, and we find it good for hosting guests as the living room feels bigger. When it is just the two of us, we enjoy how bright, cosy, and close to nature the home feels.

However, the best part for us is being able to spend more quality time with our son’s family even though we have our own private spaces. We also get to take turns to cook sumptuous dinners for everyone!

For more housing options for seniors, read here. Planning to purchase an HDB BTO flat? Find out everything you need to know in this step-by-step guide.

HDB loans or bank loans? That’s probably what many first-time home owners are wondering, after deciding that they’re ready to take the plunge and buy an HDB flat. We’re here to break down the differences.

HDB Loan vs. Bank Loans:

• HDB loans require a smaller cash outlay
• Interest rates of bank loans are highly variable, whereas HDB loan rates have not changed much as they are pegged to the CPF rate
• Bank loans are currently more affordable than HDB loans, at the prevailing interest rate
• You can switch from an HDB loan to a bank loan, but not the other way around

Downpayment

A huge advantage of taking an HDB loan is that you are able to fork out a smaller amount of cash for your downpayment.

The maximum loan-to-value (LTV) ratio for HDB loans is 90%. So you can borrow up to 90% of your flat’s value or price, whichever is lower. For the remaining downpayment of 10%, you can use a combination of cash or your CPF OA savings.

On the other hand, the maximum LTV ratio for bank loans is 75%. This translates to an extra 15% in downpayment as compared to an HDB loan. What’s more, 5% must be paid in cash for the downpayment, with the remaining 20% to be paid in cash and/or CPF OA savings.

Interest rates and monthly instalments

The interest rate for HDB loans is fixed at 0.1% above the prevailing CPF rate. With the current CPF rate at 2.5%, the interest rate for HDB loans is 2.6% per annum.

In contrast, depending on market conditions, bank loan rates are more variable. This applies to loan packages that are pegged to fixed interest rates as well. After a lock-in period of 2 to 5 years, these so-called fixed rate home loans follow a floating rate.

So technically, there is no perpetual fixed rate home loan in Singapore.

Bank loan interest rates are mainly determined by these three floating rate benchmarks:

• Singapore Interbank Offered Rate (SIBOR), which will be replaced by Singapore Overnight Rate Average (SORA) by the end of 2024
• Board Rate (BR)
• Fixed Deposit Home Rate (FHR)

Whether you’re taking a SIBOR, SORA, BR or FHR home loan, the interest rate is the prevailing rate plus the bank’s spread.

So “3M SIBOR + 0.75” means the interest rate is the prevailing three-month SIBOR rate, plus 0.75% charged by the bank (the spread). Every three months, when the SIBOR rate changes, the interest rate will be changed to match the new rate.

This means that if you have a 1M SIBOR rate home loan, the loan repayment amount will change every month. If you have a 3M SIBOR rate home loan, the loan repayment amount will change every 3 months, and so forth.

Likewise, “BR + 0.5” means that the interest rate is the current board rate plus the bank’s spread of 0.5%. The difference is that the board rate is set entirely by the bank.

An FHR home loan is pegged to the bank’s fixed deposit rates, so it’s pretty similar to a BR home loan as the rate is essentially determined by the bank.

Why are bank loans more affordable?

The historical interest rate for bank home loans is between 3% to 4% per annum. This is more expensive than HDB loans.

However, due to the Global Financial Crisis in 2008, bank interest rates have remained low for around 10 years. Currently, bank loans are around 1.8% per annum, as opposed to HDB’s 2.6%.

The lower interest rates translate to lower monthly instalments

If the flat is priced at $350,000, the maximum loan quantum for an HDB loan, based on an LTV of 90%, is S$315,000 and downpayment is S$35,000. If you’re taking a 25-year loan tenure, the monthly repayments will be $1,429.

In contrast, if you’re taking a bank loan with an LTV of 75%, the loan quantum will be S$262,500. And the downpayment will be S$87,500.

On a 25-year loan tenure, assuming an interest rate of 1.8% per annum*, the monthly repayments will be cheaper at S$1,087.24.

*This is based on current, typical loan rates. We cannot assume that the bank interest rates will remain at this level over 25 years.

Income cap

Whether you’re buying a BTO or resale flat, HDB loans come with stricter eligibility criteria, including income ceiling. If your gross monthly household income is more than S$14,000, you won’t be eligible for an HDB loan.

Conversely, bank loans don’t have an income cap, so it’s suitable for those with a higher income.

Tenure

HDB loans are capped at 25 years, while bank loans for HDB flats have a longer maximum loan tenure of 30 years. (However, the LTV will be reduced to 55% if the loan tenure exceeds 25 years.) 

Having a longer tenure can be a good thing, as it allows you to lower your monthly repayments and spread it out. On the other hand, it also means paying a higher interest.

Refinancing

You can refinance your HDB loan into a bank loan (subject to the bank’s approval), even after getting the initial 90% LTV. By taking a home loan with a lower interest rate, you can reduce your monthly repayments.

However, you can’t refinance your bank loan into an HDB loan. What you can do is reprice it with the same bank or switch to another bank to refinance it.

Early repayment

Another good thing about HDB loans is that they don’t have an early repayment penalty. So you can pay it off earlier, such as through partial capital repayment to reduce your financial commitments.

But if you’re taking a bank loan, it’s better not to pay it off early. The bank will charge a prepayment fee if you cut short your bank loan within the lock-in period, since they earn from the interest.

Which is better?

If you’re on a tight budget, HDB loan should be considered first, as the cash outlay is smaller. The fixed interest rate also gives you a better idea of how much you’re paying monthly for your home loan. If you find the interest is too high, you can always refinance from an HDB loan to a bank loan later, but not the other way around.

If you intend to upgrade fast (e.g. sell the flat and buy a new home, such as a private property, as soon as you can), you may want to consider a bank loan, or quickly refinance into a bank loan from an HDB loan. This could reduce monthly repayments, and minimise the interest eating into any resale gains.

Speaking to a mortgage broker can also help you better understand more about suitable home loans.

Looking to embark on your home ownership journey? From the types of CPF housing grants to a guide on using the HDB Flat Portal to purchase your HDB flat, read here to find out more!

This article was adapted from 99.co, Singapore’s fastest growing property platform for information like resale HDBs for sale and rent in Singapore. Check out the original article here.

Source: mynicehome.gov.sg

There are many ways we can share about our first homebuying journey on social media – often a Facebook or Instagram post/ story. For 33-year old Gwendolin who just collected the keys to her BTO flat in Bidadari, she chose to share her experience through TikTok!

Gwen applied for her BTO flat in Bidadari during the February 2016 sales exercise, and just collected the keys from HDB. Besides showing her and her family (including her 1-year old daughter!) checking out their new flat, Gwen has also created more TikTok videos on things she likes about her flat – including the unique “environmentally-friendly” toilet bowls that HDB provides!

Gwen and her husband opted for a 4-room unit because they like its open kitchen concept: “The kitchen has a decent-looking backsplash, which gives families the option to save on additional renovations.”

Her BTO project is close to schools and is a short walk from Woodleigh MRT station. When announced, the project was also one of the first new developments to come with the Pneumatic Waste Conveyance System (PWCS), an automated waste collection system that facilitates cleaner and more efficient waste disposal.

In a chat with 99.co, Gwen shares more about her home ownership journey, as well as advice for potential and new homeowners:

What made you decide to apply for a BTO flat? 

A BTO flat is a brand new unit with a 99-year lease, so we figured there will be fewer wear and tear problems that we have to deal with. As resale flats may require electrical re-wiring and additional plumbing works, we thought renovation costs for newer flats may be relatively lower.

At the current moment, we are staying with both our parents – half a week at each parents’ place, We can’t wait to experience having our own place.

We decided to go with our BTO project in Bidadari as the flats on offer were within our budget, and because it’s near where my in-laws are staying. We were blessed to be able to get a queue number on our second application attempt.

Was the key collection a smooth process?

One of our key concerns was the time needed for flat completion. The only frustration is the delay caused by the pandemic, which we understood was inevitable. Although our flat’s estimated completion was scheduled for 4Q 2020, we collected our keys in July 2021.

We did write to HDB to explain that we are living with our in-laws and that we have a child. We asked HDB to prioritise key collection for us and they did. We were the first homeowners in our blocks to receive our keys and I’m very grateful for that.

Whilst waiting for the keys to our flat, my husband and I started planning for renovations early. We sourced for interior designers, so we felt like things were moving on our part. Once we got our keys, we could immediately kickstart renovation works.

Did you take up any housing grants for the flat?

Unfortunately, we were not eligible for the Special Housing Grant (SHG) because it is applicable only for 2-room Flexi, 3-room or 4-room flats in non-mature estates, whereas Bidadari, which is part of Toa Payoh town, is a mature estate. While we did not get the grant, we did benefit from extra ballot chances under HDB’s Married Child Priority Scheme.

As a mother and wife moving into your new home, what insights have you gained through the experience?

In a way, my husband and I had were “forced” to live with our in-laws while waiting for our new flat to be ready – we could have forked out money to rent a place but chose not to. We realised it is not that bad after all. We may explore doing that in future should we need to take care of them or for childcare purposes. Living with in-laws may also mean that you live under their rules because it is their place, so there are frustrations in not being able to live that freely.

Moving into a new home after having a child has its positives because her grandparents will get to spend time with her, and we have more help at home while she’s young.

Any advice for young, millennial Singaporeans making their first home-buying journeys?

If you know that your significant other is the right one early on, consider applying for a flat early, especially if you want to enjoy your exclusive space for two before a baby comes along. Don’t be discouraged during the long wait. It buys you time to save up for a nice renovation!

This article was adapted from 99.co, Singapore’s fastest growing property platform for information like resale HDBs for sale and rent in Singapore. Check out the original article here.

Source: mynicehome.gov.sg

HDB will be building new public housing in prime, central locations like the city centre and the Greater Southern Waterfront. These flats will be sold under a new housing model called the Prime Location Public Housing (PLH) model.

What is PLH?

The Prime Location Public Housing (PLH) model is a public housing model that aims to keep HDB flats in prime, central locations affordable, accessible, and inclusive for Singaporeans.

This model was developed after considering feedback from the public—more than 7,500 Singaporeans, including academics and industry experts, shared their views on the model over almost a year.

Which areas will this new public housing model apply to?

The PLH model will apply for selected public housing projects in prime and central locations like the city centre and surrounding areas, including the Greater Southern Waterfront. The PLH model will not be retrospectively applied to existing flats.

What are the HDB flat types available for PLH flats?

About 960 units of 3-room and 4-room flats will be offered for sale in the first project to be launched under the PLH model at Rochor.  The project will also include 40 units of 2-room rental flats.

Will there be additional subsidies for prime location flats?

New PLH flats are priced with additional subsidies, on top of the substantial subsidies already provided for BTO flats today. These additional subsidies keep PLH flat prices affordable for a wide range of Singaporeans.

When PLH flat owners sell their homes, they will pay to HDB a percentage of the resale price of the flat, commensurate with the extent of the additional subsidy provided. This is to be fair to other BTO flat owners who do not receive these additional subsidies. For the pilot projects, River Peaks I and II, this amount is fixed at six percent of the higher of the resale price or valuation.

All prevailing grants such as the Enhanced CPF Housing Grant (EHG) of up to $80,000, will continue to apply for eligible families who buy a PLH flat.

What are the eligibility conditions for the purchase of prime location flats?

To buy a new PLH flat, you must meet the prevailing BTO eligibility conditions such as being a Singaporean household and meeting the household income ceiling, currently set at $14,000.

Beyond the initial purchase, subsequent flat buyers of resale PLH flats will also have to meet the prevailing eligibility conditions for the purchase of BTO flats. This helps to ensure that PLH flats remain inclusive and accessible to a broad group of subsequent flat buyers over time. Without these conditions, the resale prices of these prime location flats may rise beyond the reach of many Singaporeans; and over time only the better-off will be able to afford to buy them.

A summary of key eligibility conditions for purchase of 3-room and larger flats are below:

Note:
* With or without CPF housing grants.
^ Or $21,000 if purchasing with extended/multi-generation family.

Will there be flats set aside for priority allocation under the Married Child Priority Scheme?

Yes, flats will continue to be set aside for those applying under the Married Child Priority Scheme (MCPS). The priority quotas will be adjusted for individual PLH projects, to provide opportunities for Singaporeans whose family members do not live nearby, to also live in prime areas. 

How long will I need to live in the PLH flat before I can sell it? Will I be able rent out spare bedrooms or the whole flat?

Given the prime locations and additional subsidies provided for PLH flats, PLH flat owners will need to live in their flats for at least 10 years before they can sell them on the open market or invest in a private residential property. This measure helps to safeguard PLH flats for families with genuine housing needs and discourage speculation.

While owners of PLH flats may rent out spare bedrooms, renting out of whole flats is not allowed, even after MOP.

Note:
* MOP is five years.
^ MOP is ten years.