9 CREATION'S GUIDE FOR NEW HOMEOWNERS
the process and procedures whilst obtaining a BTo
Buying a BTO (Built to Order) flat is one of the most exciting, and far-reaching steps young Singaporeans take in their journey to adult independence. Naturally, these are thrilling times, yet they also tend to be a bit of a pain – you know, procedurally. To lessen the burden and smoothen the way forward, we have compiled all the relevant data and structured it into a comprehensive step-by-step guide to buying your BTO. So, let’s lay out the path to independent homeownership.
Before you even think of buying a BTO, you have to be prepared to jump through all of Housing Development Bureau’s (HDB) hoops and meet its stringent eligibility criteria.
Buying a BTO: Eligibility
Let me just start off by saying that this is far more convoluted than it may first appear, mainly because HDB simply designed this system to give you a headache. Evidently, this is going to be a bit draggy, but I am afraid that in this instance promptness will have to be sacrificed on the altar of comprehensiveness. Bear with me!
To be eligible for a BTO, you will have to meet all the following criteria:
- 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 combined income (also called household income) does not exceed $12,000*
- You do not own other property, be it overseas or locally, and you have not disposed of any 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.
*Note: for certain 3 bedrooms BTOs the ceiling may vary between $6000 and $12000. If this is the case it will be mentioned in the description specific to that BTO at the launch.
*There is more… You will have to tick one of the boxes below:
- 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
*Note: this applies solely to BTO flats of 3 bedroom or larger. ECs, DBSS, and Flexi flats are a whole different ballgame, with their own unique set of eligibility criteria.
Getting a HDB Home Loan: Eligibility
Even if you meet all the eligibility criteria for buying a BTO, there is still the issue of whether you can actually afford the flat. Most Singaporeans enter into what is likely to be the greatest financial decision of their lifetime with the help of a home loan. Besides a common bank loan, you can also opt for a special loan issued by HDB. This is a decision you should not be taking lightly. Just in brief, in the event you are eyeing an HDB loan, here are the eligibility criteria:
- You are applying for an HDB flat
- 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
If none of the eligibility criteria, either for buying a BTO or for the loan that will help pay for it, has held you back, then congratulations – you can now start the process of buying a BTO.
The abundantly 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. You can also sign up for HDB email or SMS alerts to make sure you’re seeing the new announcements as soon as they happen. As you can see on HDB’s website, launches are categorised in terms of the area in which they are set, effectively dichotomizing the new builds between mature and non-mature estates. Whilst conventional wisdom tells us to flock to the more mature estates, there are some compelling reasons not to.
II. The Application Period
Every BTO launch has a one week application period. At the beginning of the week, the indicative prices and preliminary designs will be made available to the public. You can apply within this week either online, at the HDB Hub or at any of the HDB branches. A non-refundable administration fee of $10 is required at this stage.
III. The Selection Process
Applicants tend to outnumber the available units by quite a bit, and especially if you are eyeing some prime real estate you will face steep competition. What happens next is that all the applications are plugged into a computer at the HDB, and ballots are chosen at random. About six weeks after you’ve submitted your application the HDB will notify you as to whether your application has been successful or not.
IV. Appointment with HDB
If you were lucky enough to secure a spot on the shortlist, you will be invited for an appointment to book a flat in about one to two weeks after you have heard the good news. As can be expected, HDB loves forms, lots and lots of forms – and to the appointment, you will have to bring the following documents, if they apply to you:
- If you are employed by the Singapore Armed Forces/Civil Defence/Police Force, you are required to provide certified copy of your pink/blue identity card from the Personnel Department
- For those on the application whom are not Singapore citizens, passports are required
- If you applied with children then their birth certificates are required
- 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
- If you choose to take an HDB loan, then you will have to bring a valid HDB Loan Eligibility Letter (HLE). If you met all the eligibility criteria mentioned previously, then you can simply apply for such a letter at HDB.
Additionally, you will have to bring your NETS card; at this stage, an option fee is due of $1000 for a 3 bedroom flat, and $2000 for a 4 bedroom 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 (the amount of which depends on your home loan). 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 an estimated 4 months of waiting, you will be invited to sign the lease agreement. There is no going back after this. Remember how HDB loved forms? Yeah – here we go again, and this is what you’ll need to bring:
- Identity cards
- If you are taking an HDB loan, the HDB Loan Eligibility (HLE) letter
- If you are taking a bank loan, the Letter of Offer from the bank
- If you are presently a CPF Board employee, the latest CPF statement(s)
- The receipt of your option fee
- Your bank passbook and a photocopy of the page stating your name and bank account number
After all, documents have been validated and you have signed the lease agreement, HDB will notify you of the exact date that the development will be finished.
*Source of Information is from the official HDB Website.