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HDB Loan Eligibility: Guide To Buying Your First HDB Flat In Singapore

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Affordable housing is always available in Singapore. In fact, an HDB flat is one of the best kinds of properties you can own in the country. The Singapore Housing Development Board have subsidized these properties for Singaporeans and even foreigners who wish to have a private condominium-level of living but for a far lower price.

There are distinct differences living in a condo and HDB flat. Some amenities in HDB flats are communal whereas you can find them as private amenities in condominiums. However, these flats are easy to own in Singapore. You can do so by just following this guide!

Home Buyer Concept

What Determines Your Loan Eligibility?

Your loan eligibility depends on whether you’re a new or a repeat homebuyer who owns property and is putting it up for sale. Furthermore, you’ll need to know the number of your outstanding loans to determine your loan-to-value ratio (LTV), mortgage servicing ratio (MSR), and total debt servicing ratio (TDSR). Here is everything you need to know to determine your financing eligibility for HDB flats.

Home Key

Homebuyers Vs Property Owners

First-time homebuyers need to take out financing in the form of a mortgage or a HDB concessionary loan Singapore to own an HDB flat. Because these properties aren’t as expensive as traditional residences or premium condominiums, they’re financially manageable if the mortgage is the only financing the first-time homebuyer needs to handle. However, they might find bank financing challenging due to the high-interest rates that often accompany unsecured loans.

On the other hand, property owners have it easier than homebuyers. They can sell their existing property to purchase a high-quality, private condominium-equivalent HDB flat. Additionally, they can use it as equity for lower interest-rate HDB flat financing.

Home Buyer

I’m a First-Time Homebuyer, How Do I Start? 

First-time HDB flat homebuyers need to fulfill every criteria HDB requires before they can start financing their first flat.  The very first thing new HDB flat buyers need to know is to get a financing estimate from the HDB or bank they intend to take out financing from.

If you have a good credit score Singapore, the HDB or bank will only use you and your spouse’s current income, savings, and age into consideration.  We highly advise you get an HDB/bank estimate before you go HDB flat-hunting to help you see which options are available and possible for you to own. 

However, do note that if you are planning on getting a HDB concessionary loan, you are only eligible if your income is not above S$12,000 or S$18,000 for extended families. If your income exceeds the amount, you will be ineligible for the HDB concessionary loan, and will have to take out a bank loan in Singapore instead. 

HDB Flat Buyer
Public looking at the BTO flat model at HDB Hub on 30 May 2016,photo by Wee Teck Hian

HDB Flat Ownership Criteria

All HDB flat buyers must be at least 21 years old, especially if they’re purchasing their flat living with their spouse, children, and parents and siblings. This rule also applies to any widowers or orphans who will individually live in the flats. However, single individuals and divorced Singaporeans below the age of 34 years old are not eligible for HDB flat ownership.

As we mentioned above, the HDB and banks will determine the loan estimate depending on you and your spouse’s income. However, a built-to-order (BTO) three-room HDB flat costs about S$350,000-S$380,000 upon resale. Therefore, it’s imperative to at least have an S$50,000-S$80,000 combined annual income for excellent financing estimates from the HDB and banks.

LTVs, MSRs, and TSDRs

Singapore intends to protect financial institutions, banks, and borrowers from going into deep debt and hugely affecting the economy. Therefore, the loan-to-value (LTV) ratio, mortgage servicing ratio (MSR), and Total Debt Servicing Ratio (TDSR) play major roles in determining the loan estimates the HDB, banks, and financial institutions can provide to you.

LTV ratios limit your maximum housing borrowing amount from a financial institution depending on the number of outstanding property loans you’re paying for. The Monetary Authority of Singapore has an in-depth explanation about it here.

MSR is the Monetary Authority of Singapore’s legal limit for the total amount from your income that you can use to repay your housing loan. The HDB, banks, and other financial institutions only recognize 30% of your gross monthly income as your valid repayment amounts.

TDSR takes into consideration all the debt you currently have, which include car loans, home loans, college fees, and others. If these repayments exceed 60% of your gross monthly income, the HDB, banks, and other financial institutions can only grant you a lower financing amount.

Here’s one loan estimate calculation example:

If you and your spouse’s combined gross yearly income is about S$90,000, then your monthly income is:

S$90,000/12 = S$7,500

You plan to finance an HDB flat with over S$350,000 in total pre-selling value. Your LTV (assuming you have no housing loans): 

S$350,000 x 0.75 = S$262,500

Your MSR is: 

S$7,500 x 0.30 = S$2,250 housing loan payments per month

Assuming you’re paying S$500 for your car loan, S$1,000 for education, and S$200 for an appliance loan, your gross monthly income is at:

S$7,500 – (S$500 + S$1,000 + S$200) = S$5,800.

Your TDSR is:

S$1,500 x 100 = 150,000

150,000/S$5,800 = 25.86 or 26%, which is still below the 60% monthly income TDSR Singapore limit of the Monetary Authority of Singapore

Why Do Borrowers Need an HLE Letter?

What’s an HLE Letter?

Any prospective homebuyer looking for affordable HDB flats and housing has to provide an HDB Loan Eligibility (HLE) letter to the HDB, bank, or financial institution that will help them with financing. This letter expresses your intent to book a new HDB flat, gain an “Option to Purchase” if a seller and you have agreed to purchase their existing HDB flat or apply to take over flat ownership by a family member, friend, or colleague with no financial transfer involved.

How Does it Affect Prospective Borrowers?

Your HLE isn’t just an application letter to obtain permission from the Housing Development Board. Your HLE letter will have you plan out your finances. Your HLE letter will contain your eligible loan amount, monthly or regular installment payments, total repayment period, and the terms and conditions of your financing or purchase of the HDB flat.

All HLE letters are valid only within six months. You can revalidate or obtain a new HLE letter if you apply for another within one week before the expiry of your first letter.

How to Apply for an HLE Letter?

First, you’ll need to head to the HDB’s website. Then, you’ll need to follow three steps:

  • You’ll need to submit an HLE application. Make sure all the information and facts you provide are true and correct
  • Seal it with your electronic signature as you submit your supporting documents for further proof
  • Apply for an HLE letter, which will involve credit assessments by the HDB

Once finished, you can obtain your HLE letter by mail or e-mail (which you can print out or forward to the financial institution of your choice.

How Much Can You Receive From Successful HDB Loan Applications?

Rates of HDB Loans

A successful HDB loan application can grant you the financing that reaches a maximum of 75% of the total value of the HDB flat or property. As we’ve explained, TLVs, MSRs, and TDSRs will play a huge role with the rates you’ll receive from HDB, banks, or financial institutions. You can refer to the subhead above, which includes a sample calculation to help you calculate a rough rate estimate.

Keep in mind: a higher HDB flat value, which means owning a flat with four or more bedrooms, will result in higher HDB loan rates. Higher financing will mean an added burden to your budgets, and this will affect the final loan rates you’ll receive from the HDB or your chosen bank or financial institution. 

How Can You Start Your HDB Loan Application?

The very first step to obtain a successful HDB financing is to know your eligibility.  Therefore, you’ll need to follow the steps above to obtain your HLE letter. This document serves as a confirmation about the loan rates your financiers can provide to you.

Next, once you have the letter, HDB’s website allows you to upload supporting documents. Then within 14 days, you’ll receive an HDB confirmation finalizing your application details including payment method and final metrics, such as interest rates.

What Documents Will You Need to Submit Based on Your Employment?

Employed With CPF

  • 3 months worth of payslips
  • 15 months CPF contribution history

Employed Without CPF

  • 6 months worth of payslips
  • Credit report from Singapore’s Credit Bureau
  • 6 months recent bank statements/passbook from date of application


  • Latest notice of assessment
  • Credit report from Singapore’s Credit Bureau
  • 6 months recent bank statements/passbook transactions from date of application.

Commission-Based Workers

  • 6 months worth of commission statement or payslips
  • 15 months most recent CPF contribution
  • Credit Bureau report
  • 6 months most recent bank statements or passbook transactions from date of application

Odd Job Workers

  • Latest notice of assessment
  • Previousu 15 CPF contributions
  • Credit report from Singapore’s Credit Bureau
  • 6 months worth of bank statements/passbook transaction records

Unemployed Persons

  • Full-time students beyond the age of 18 but not above 62 must submit a valid Student Pass to begin their application
  • If you’re unemployed for less than 3 months, you’ll need proof of income from your previous employer
  • Latest 15 months of CPF contributions

Previous HDB Housing Loan Applicants

  • After disposing of your previous HDB flat property through a sale, you’ll need to present completion statements that indicate the CPF refund and cash you’ve obtained through the sale
  • If you’re a divorcee, you’ll need to show proof of equal and justified flat divisions on profits upon selling the HDB flat

Online HDB Loan Application

Once you’ve obtained your HLE letter, you can upload your documents at HDB’s online application facilities. You’ll need to submit all your documents in PDF or JPG format. Alternatively, you can submit your documents through e-Service kiosks in different HDB branches nationwide.

You’ll need to wait at most 14 days to receive a decision from the HDB regarding your loan application and estimate. You can log into your HDB account to view your application status. If you don’t intend to go through the HDB’s financing, you can use banks or financial institutions.

Bring along a copy of your HLE, and you can discuss other versions of HDB flat payment plans. Moneylenders such as Fortune Credit1 Fullerton CreditA1 Credit, or Bugis Credit can help you with your HDB flat financing too. Similar to banks, you’ll need to bring along your HLE letter.

Then, they’ll assess the terms, regular repayments, and other information necessary to help you obtain your financing. Lastly, moneylenders never refer to credit scores when it comes to approving financing.

Repayments and Consequences

What Happens If I Fail to Pay For My HDB Loan?

Singapore has a Home Protection Scheme (HPS) that protects unemployed Singaporeans from inflating debts due to multiple financing. If you’re suddenly unemployed while paying for your HDB flat, you won’t miss repayments. The HPS will pay your existing HDB loan, and you’ll pay for it with smaller interest rates once you get back on your feet.

If your health recovery will take quite a long time due to your health constraints by the time of the accident, the HDB might defer your HDB loan repayments for 12 months. If you have a spouse or children who are old enough to work, the HDB might enlist their help in repaying the house temporarily.

What Happens If You Really Can’t Pay for The HDB Loan At All?

The HDB’s last resort is to find you a public rental flat while you rent out your existing HDB flat to another person. You can choose to live with a stranger renting a room in your home if it feels like a better option in repaying your HDB financing. 

Simply put, you won’t lose your HDB flat. At worst, the HDB will assist you in liquidating the property through reselling if you need more time to recover financially and remove yourself from debt.

In Summary

HDB loan eligibility depends on your financial capability and the flat’s market cost. The Housing Development Board is your best option when it comes to financing. But, if their rates aren’t satisfactory, you can always work with bank personal loan, financial institutions, and moneylenders in Singapore to help you with your financing needs.

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