HDB PURCHASE PART 1

HDB Purchase Part 1

For prospective buyers, HDB purchase does represent good investment for a small sum of money. Firstly the price of HDB flats, though has risen recently, still remains affordable for the vast number of people. This includes the flexibility that it carries. You can rent or sub-rent some or all units.

Approval has to be obtained from HDB.. which, in recent days, has relaxed its policy of sub-letting. Generally, its Minimum Occupation Period (M.O.P) has been reduced. And of course, if you have excess cash, you can always buy more other private properties.. etc.

The revised M.O.P is

5 YEARS for owners of subsidized flats, i.e flats purchased directly from HDB or from the Open market with a CPF Housing Grant.

3 YEARS for owners of non-subsidized flats, i.e flats purchased directly from the Open market without CPF Housing Grant.

For more information, please call: 1800-2255432

Or go to http://www.hdb.gov.sg/ > Home Owners > Use and Ownership of Flats > Subletting Your Flat/Room > eServices

Eligibilty (HDB)

Applicant must be Singapore Citizen or Permanent Resident and should have a minimum combined income of S$24,000 per annum. Definition of income being: Bonuses, commission, overtime and other income sources can be taken into consideration at the banks’ or financial institutions’ discretion.

Most lenders have a minimum age requirement of 21 and max at 71 years old.
All mortgagors must be borrowers and vice-versa and capped to a maximum of four.

Cost Involved

1) Stamp Duties

For new purchase: 1st 180K – 1% , next 180K – 2%, above 360K – 3%

2) Legal Fees

This usually costs between S$1750 to S$3500 depending on factors such as property type and choice of lawyer. CPF can be used to pay the legal fees, which is billed upon completion of your mortgage and/or purchase.

3) Cash Outlay Due To Difference Between Purchase Price And Valuation Price

If the bank’s or financer’s valuation is lower than your purchase price, you will have to pay the difference in cash before any loan can be disbursed.

4) Home Protection Scheme (HPS)

CPF Board requires all members who are using CPF to pay their monthly instalments for their HDB loan to be insured under HPS. However, this is subject to members' eligibility for coverage based on their health. HPS insures members up to 65 years of age.

Useful CPF links : Using CPF to buy a house , Changes to CPF Properties Scheme

Appointment of Lawyers

Lawyers performing the following functions are required when purchasing property:

a) Purchase and financing (if any) of property (acting on your behalf)

b) Housing loan application (acting on behalf of the bank or financial institution if you are taking a loan)
c) Withdrawal of funds from the CPF Board (if you are using CPF funds)