If you are a first-time homebuyer in Singapore who has already made the decision on picking an HDB flat, you’re probably deciding between getting a BTO or a resale flat.

And if you’re reading this, chances are you’ve already made the decision to go with the resale flat route, so here’s a step-by-step guide for an in-depth walkthrough of the HDB resale buying process.

From finding out if you’re eligible to obtain an Option to Purchase (OTP) to finally getting your hands on your own HDB resale flat, we’ve got you covered!

The whole process is far simpler than you probably think. The bulk of the steps can actually be done on a single website, the HDB Resale Portal.

First things first…

HDB Resale pre-purchase checks: HDB schemes

Before you begin your HDB resale purchase journey, it’s essential that you go through the eligibility criteria to check for the specific eligibility schemes that apply to you. Some of the schemes include the following:

Public Scheme

For those looking to buy a flat with a family member – Could be your spouse, parent or child, etc…

Fiancé/Fiancee Scheme

For those looking to buy a flat with your fiance/fiancee

Single Singapore Citizen Scheme

For the fiercely independent souls, Singapore Citizens aged over 35, looking for a space to call their own.

Joint Singles Scheme

For Singapore Citizens aged over 35, looking for a shared space with a group of friends.

Non-Citizen Spouse Scheme

If your Spouse is not a Singapore Citizen or a Permanent Resident (PR), do take note of the following set of eligibility conditions that apply to all schemes:

Income ceiling: Unlike buying a BTO flat, there are no income ceilings that prevent you from buying an HDB resale flat. However, income ceilings still come into play when applying for CPF Housing Grants and HDB Concessionary Home Loans.

Ownership of other properties (HDB or Private or Overseas): If you, or any other person in your resale flat application, own another HDB flat, or a private or overseas property, you are required to dispose of them within six months of your resale flat purchase transaction.

Equipped with this knowledge, you are now ready to begin your resale HDB buying journey.

Step 1: Register your intent to buy

Register your “Intent to Buy” an HDB Resale Flat, by logging in to the HDB Resale Portal via your Singpass.

Doing this will give you an instant assessment on your eligibility to buy an HDB resale flat as well as for CPF housing grants and HDB housing loan.

Do note that if you are buying the flat with a partner or family, only one person would need to register their Intent to Buy. If you’ve engaged a property agent to aid in your buying process, they’re not allowed to register the Intent to Buy on your behalf, but they can walk you through the process.

Your Intent to Buy is only valid for 12 months, following which you will have to re-apply before proceeding with any other steps to purchase your HDB flat.

Step 2: Planning your finances

Payments that you will have to make for a Resale Flat purchase include:

• Secure Option To Purchase (OTP)
• Initial payment
• Cash payment for balance purchase price*
• Additional miscellaneous costs
• Resale application administrative fee
• Processing fee for Request for Value
• Fire insurance etc

*The balance purchase price here depends on whether you choose to take up a HDB Concessionary Loan or bank loan. The HDB loan can cover up to 90per cent of the flat’s valuation or price, whichever is lower. The remaining 10per cent (the downpayment) can be paid off through a combination of your CPF Ordinary Account (CPF-OA) funds, or in cash.

Alternatively, if you choose to take up a bank loan, that can only cover up to 75per cent of the valuation (or purchase price, whichever is lower). Another 20per cent can be paid through a combination of your CPF-OA funds or in cash.

All bank loans have a minimum downpayment of 5per cent that need to be paid in cash.

Additionally, if you take up a bank loan, you should get a In-Principle Approval (IPA), which states how much they’re willing to lend you. Once you know how much the bank is going to lend you, you can prepare the downpayment before you actually commit to anything.

With all these payments in mind, when deciding between the pool of suitable flat choices within your budget, you’ll need to understand the different ways you can pay for your flat, and the limitations for each.

99.co also provides a mortgage calculator to help you get a gauge of your current financial position and how much you can actually borrow to get your ideal home.

ALSO READ: Rents for HDB flats and condos continue to rise in June as demand surges

Can I pay for my resale flat with my CPF savings?

If you’re wondering what you can pay with savings in your CPF-OA, here is the list:

• Initial payment in whole or in part (depending on if you an HDB or bank housing loan)
• Partial or full payment for the flat purchase
• Monthly mortgage instalments
• Legal fees (Depending on the law firm)
• Stamp duties

Important Tip: Do note that due to the CPF Housing Withdrawal Limit (120per cent of your flat’s value) and the limitations regarding flats with Shorter Leases (i.e. less than 60 years) you may not be able to use as much of your CPF savings on your resale flat purchase as you may have hoped.

Also, you can use your CPF to purchase a flat even if there are only 20 years left on the lease, but not if there’s less than that.

Note that most banks won’t approve a loan for properties with 30 years or less on the lease.

Can I take a housing grant to pay for my HDB resale flat?

When buying a resale flat, you can use the CPF Housing Grants (that could go up to S$160,000 for a resale flat) to offset the cost of your purchase. There are three grants that might be available to you, the Enhanced Housing Grant (EHG), Family Grant and the Proximity Housing Grant (PHG).

Read this: Quick guide (with infographic) to BTO and resale HDB Grants for couples

The EHG is applicable for couples or families earning S$9,000 or less per month. The total amount of the grant is inversely proportional to your household income, with a range of S$5,000 to a maximum of S$80,000.

For singles aged 35 who are buying a resale HDB flat, your income requirement is naturally halved, as is the amount that you’ll be granted.

The Family Grant, if for first-time couples/families with a combined income ceiling of S$14,000. If you’re applying together with more family members, like your parents, the income ceiling is raised to S$21,000. The amount you can receive is up to S$50,000.

Finally, the PHG gives a maximum of S$30,000 for HDB resale flat buyers who want to live with their parents. The amount is adjusted for those who choose to stay within 4km of their parents as an alternative. There’s no income ceiling for the PHG.

Some quick considerations when going through the full list of CPF housing grants:

Are you a Singapore Citizen or applying with a Singapore Citizen? If not, you’re ineligible for the grants listed above.
Are you a first-time applicant and/or applying with a first-time applicant? If not, you’re ineligible for the grants listed above.
What is your relationship status? Single applicants are only eligible for half the grant amounts.

These are some factors of consideration that will direct you to the applicable grant.

How do I go about getting a housing loan?

Another option you could do is to take on a housing loan with HDB or a bank of your choosing:

Housing Loan via HDB: While going through the HDB Resale Portal process, you’ll be guided through the application for your HDB Loan Eligibility (HLE) letter. The HLE letter doesn’t bind you to an HDB loan, it’s only the first step to getting a loan but it should be obtained before you sign the Option to Purchase,

Bank Loan: You must obtain an In-Principle Approval first to prepare your downpayment amount for the bank loan.

Step 3: Choosing your HDB resale flat

Now, you are ready to start combing the various avenues for your HDB resale flat!

Start by shortlisting a neighbourhood you want to live in. (Tip: Choosing an HDB flat within 4km of your parent’s place – or living with your parents – gives you the opportunity to apply for the HDB Proximity Housing Grant (PHG) of up to S$30,000)

You can then use the 99.co’s many location functions (you can even map out your own specific area of interest on our map view pages) to find HDB resale flats that are listed for sale in that neighbourhood.

Bonus: The portal lets you filter your search by HDB Sale Quotas so that you won’t waste your time shortlisting and enquiring on a flat that has reached the maximum quota for the applicable ethnicity.

One of the key highlights of getting a resale flat as opposed to a BTO is that you get to pick any flat from your favourite/ideal neighbourhood or location in Singapore.

ALSO READ: Couple buys Marine Parade HDB flat for over $1m despite 51 years left on lease

Step 4: Receive the HDB Option to purchase (OTP) from the seller and exercise it

Once you have come to an agreement with the seller with regards to the sale price, they will then offer you an Option to Purchase (OTP).

*Note: This comes with an Option fee (not more than S$1,000), which is a deposit to secure the OTP. This allows you to “chope” the flat at the agreed upon price.

After you have been granted the OTP, apply for a valuation of the flat via the HDB website, by the next working day.

Remember that you have already agreed on a price with the seller and secured the OTP; so if the asking price is higher than the HDB valuation, the difference is paid in cash (this is called Cash Over Valuation, or COV).

A valid valuation report is necessary if you are taking a loan to finance your purchase (for both HDB or bank loan) or if you are using your CPF to either buy your flat or for your loan instalments.

If you’re satisfied with the valuation and want to proceed with the purchase, you’ll do so by exercising the OTP within a 21-day window (up to 4pm on the date of expiry). You’ll also have to pay a deposit of no more than S$5,000 (this includes the Option Fee that you have paid earlier).

Once the 21 days lapse without you paying the deposit, the seller release their flat on the open market again, and your initial offer is no longer valid.

Worse still, the seller gets to pocket your Option Fee!

Step 5: Submit resale application to HDB

Once you have exercised the OTP, both you and your seller have to submit your respective portions of the resale application separately, within 7 days of either submission. (If the seller submits first, you have seven days to submit your portion and vice versa.)

The next thing is definitely the most exciting… collecting your keys! Head down to HDB Hub in Toa Payoh and attend the HDB Appointment with the seller and get the keys to your new home!

Step 6: You’ve got your house… now what?

That’s really the entire HDB resale home-buying process, from deciding that you want to get a resale over a BTO, to moving into your new home. The entire process will take you roughly two months from start to completion.

Additionally, you should begin exploring renovation options (e.g. speaking to a contractor or sourcing for the cheapest renovation loan) before key collection. This will help you to reduce the wait time before you actually move in, since your contractor would be able to begin work immediately once you have received your keys.

Finally, there are some other considerations that you have to take note of after getting your flat, such as fire insurance, and choosing whether to service the loan with cash or CPF.

This article was first published in 99.co.