Buying a Built to Order (BTO) flat is one of the biggest steps young Singaporeans take in their journey to adulthood. To smooth your way forward, we’ve compiled a comprehensive this guide to buying your BTO:
Step 1: Be Eligible
You need to meet the following criteria to buy a BTO flat.
- At least one of the applicants is a Singaporean Citizen
- At least one other applicant is either a Singapore Citizen or a Singapore Permanent Resident.
- At least one of the applicants is 21 years or older
- Your monthly household income does not exceed $12,000*, for 4-room or bigger flats.
- You do not own other property, be it overseas or locally, and you have not disposed of any private property within the last 30 months
- You have not bought more than one new HDB/DBSS flat or EC before.
- You have not received more than one CPF Housing grant thus far.
*For three-room flats, the income ceiling is $12,000 for flats in mature estates. It varies from $6,000 to $12,000 for flats in non-mature estates.
For extended families, the income ceiling is raised to $18,000. However, note that HDB calculates your household income differently if you buy as an extended family.
In addition, you must meet these application requirements for BTO flats:
- You are applying with your spouse (and children, if any)
- You are applying with your parents
- You are applying solely with your children (in the case of a divorce)
- You are applying with a fiance/fiancee
- You are an orphan, and you are applying with a sibling
*The above applies solely to BTO flats that are three-room or larger. Note that other flat types, such as ECs or flexi-flats, have different application requirements.
Step 2A: Getting an HDB Concessionary Loan
You must meet the following criteria to be eligible for an HDB Concessionary Loan
- You are applying for an HDB property
- You are a Singapore Citizen
- You are 21 years or older
- Your gross monthly household income is below $12000 ($18000 for extended families)
- You do not own, or have not owned any residential private property in the 30 months before the application for the HDB loan
- You do not own more than one market/hawker stall or commercial/industrial property
- If you do own a market/hawker stall or commercial/industrial property you have to work in it yourself
An HDB loan can finance up to 90 per cent of your flat’s price or value (the lower of the two). The remaining down payment of 10 per cent can come from cash, CPF, or a combination of the two.
Step 2B: Using a private bank loan instead of an HDB loan
A private bank loan requires you to pay at least five per cent of your flat in cash. Another 20 per cent can be paid through a combination of cash or CPF. Up to 75 per cent of your flat price or value (the lower of the two) can be financed by the bank.
The bank’s mortgage officer will give you the details of any other requirements.
The comprehensive path to homeownership
I. BTO Announcements
Every three months, HDB will announce its upcoming flat launches. You can browse through their selection and pick your future home.
The HDB website will give you the details of where the new launches are, as well as general prices. The site will also tell you when applications are open.
II. The Application Period
There is a non-refundable administration fee of $10 to apply.
III. The Selection Process
Applicants tend to outnumber the available units, especially in mature estates. As such, a balloting process is used to decide who gets the flat (for more details on how the ballot works, visit the HDB website).
You will know the results of the ballot around six weeks later. HDB will send you a notification as to whether you’re successful. Remember to check your mail!
IV. Appointment with HDB
After your application succeeds, you are on the shortlist. In one to two weeks, you’ll be invited for an appointment to book a flat. You’ll have to bring the following documents to the appointment:
- If you are employed by the Singapore Armed Forces, Singapore Civil Defence Force, or Singapore Police Force, you are required to provide a certified copy of your pink or blue identity card from your Personnel Department
- If you are not Singapore citizens, you must bring your passport
- If you applied with children, then you need top bring their birth certificates
- If you are buying a BTO under the Multi-Generation Priority Scheme, or the Married Child Priority Scheme, then you have to bring your birth certificate and your parent’s marriage certificate
- If you are married, your marriage certificate is required
- If you are divorced, your divorce certificate is required
- If your spouse is deceased, a death certificate is required
- Your income documents, or your IRAS tax returns if you are self-employed
- If you choose to take an HDB loan, then you will have to bring a valid HDB Loan Eligibility Letter (HLE).
Bring your NETS card; at this stage an option fee of $1000 is due for a three-room flat, and $2000 for a four-room flat or bigger.
The fee will be reimbursed to you in cash, if the amount you hold in your CPF Ordinary Account exceeds the required down payment.
If you are taking a bank loan, then the option fee will go towards paying the cash portion of the down payment.
V. The Lease Agreement
After around four months, you will be invited to sign the lease agreement. This is what you’ll need to bring:
- Identity cards
- If you are taking an HDB loan, your HLE letter
- If you are taking a bank loan, the Letter of Offer from the bank
- Your latest CPF statement, or a copy of your IRAS tax return if you are self-employed
- Receipt of your option fee
- Your bank passbook, and a photocopy of the page stating your name and bank account number
HDB will notify you of the exact date that the development will be finished. From there, all you need to do is wait to collect your keys.
Buying your first home or investment property? We’re here to help. Find out how to make your property purchase safe as, well, houses. Our panel of experts are ready to answer your questions, and provide clarity on any property issues.
Consult them at Property Investing for Non-Millionaires, on 25th May 2019, at the HDB Hub Auditorium (Toa Payoh). Tickets are just $20, and early birds get a 50 per cent discount.