HDB is more complicated than private, because it is public housing therefore it comes with more rules & regulations. This page will discuss everything about transacting HDB.

The Selling Process

There are 8 steps, starting with registering with HDB with Intent to Sell and ending with HDB completion appointment. The process is non-trivia, so read this page for all the details.

The key process is for seller to find a buyer and issue a OTP with a 3-week dateline.

The Buying Process

It starts with applying for HFE from HDB. Refer to this page.

How much cash to fork out?

The max loan is 75% of the property value, with the remaining in Cash/CPF/Grant.

If your mortgage is from HDB, you only need to fork out $5,000 for the initial deposit (option fee and exercise fee).

If you’re taking a loan from bank, you need to fork out at least 5% of the property value (inclusive of the $5k deposit).

How much CPF can I use?

If the youngest buyer age + remaining lease is more than 95, then you can use all your CPF.

If it is less than 95 (ie by the time the lease ended, the buyer is not yet 95 years old), then you can’t use all the CPF. It will be prorated as such:

(Remaining Lease - 20) / (95 - 20 - youngest age) x Valuation Limit

HDB or Bank loan?

HDB is a special loan by the government at a fixed interest of just 0.1% above CPF OA interest. Since the CPF interest has not changed for many years, HDB loan interest has been 2.6% for a long time.

But it is not necessary that HDB loan is better. At times, bank interest rate can fall below 2.6%.

However, a for-sure benefit of HDB loan is that you need not use cash for the initial 5% downpayment (except OPT deposit); you may use as much CPF. For bank loan, you must to use cash to pay for the 5%.

That said, there are conditions to be eligible for HDB Loan – there is an income ceiling of $7,000 for single or $14,000 for household.

Private owner buying HDB

If you own private condo or even overseas property, you cannot buy a HDB. You cannot be a HDB owner. You also cannot be an occupier.

You must dispose them first then you can have a name in the HDB.

On the other hand, if you own a HDB first, you can later go and buy a private. Do read about decoupling and owner-occupier scheme to avoid ABSD.