Sharing buying your first flat (nus) 13 jan 2012

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Copyright © 2011 Housing & Development BoardCopyright © 2011 Housing & Development Board

Lim Pei Wen (Ms)Executive Estates Officer

13 Jan 2012

Copyright © 2011 Housing & Development Board

Scope

� Housing options

� Eligibility conditions

� Help for First-time flat buyers

� Financial Planning


Buying Your First Flat


Needs

Flat size

Near amenities

Location

Additional rooms

Must Have Good to HaveBudgetBudget


� Cater to flat buyers with diverse needs and budget

� Wide range of flats

High

Financial Ability

Low

Housing Options Available

EC

DBSS

Resale Flats

New Flats


New HDB Flats

� Main supply � Build-to-Order (BTO)

� From 2-room to 5-room flats

� In various towns, mostly in non-mature estates

� Sold at subsidised prices

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� Wide range of flat types, designs and locations

� Most in ‘move-in condition’

� Sold at market prices

� Prices result of negotiation between buyers and sellers

Resale Flats


� Private sector-developed public housing

� Designs and finishes comparable to condominiums

� Prices set by developers

Design, Build & Sell Scheme (DBSS) Flats

Natura LoftNatura LoftPark CentralPark Central Adora GreenAdora Green


� Developed and sold by private developers

� Condominium facilities

� Prices set by developers

Esparina Residences Esparina Residences Belysa Belysa

Executive Condominiums (EC)

Arc at TampinesArc at Tampines


Eligibility Conditions

•• SubsidisedSubsidised flatsflats

•• NonNon--subsidisedsubsidised flatsflats


Eligibility Conditions: For Flat Purchase

� Citizenship

� Family Nucleus

� *Income Ceiling

� # Non-ownership of Private Residential Property

Buying A Subsidised Flat

Note: * No Income Ceiling for non-subsidised resale flat

# Private property owners can buy non-subsidised resale flats for owner- occupation. Must dispose of private property within 6 months after purchase of flat.


New Flats

� Subsidised prices

� Additional CPF Housing Grant, Special CPF Housing Grant

� HDB concessionary loan

� At least 95% of supply for First-Timers. More ballot chances over Second-Timers.

� Married Child Priority Scheme

� Staggered Downpayment Scheme

First-Timer Privileges

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First-Timer Privileges

Resale Flats & DBSS Flats

� CPF Housing Grant

� Additional CPF Housing Grant

� HDB concessionary loan

Executive Condominiums

� CPF Housing Grant


More Help for First-Time Buyers

� Increase supply of BTO flats (25,000 new flats per year for 2011 and 2012)

� Raise monthly income ceiling from $8,000 to $10,000 for :

− purchase of new flats

− resale flats with CPF Housing Grant

− HDB loans for new/resale flats


More Help for First-Time Buyers

� Raise monthly income ceiling for buyers of new ECs from $10,000 to $12,000

� Tiered CPF Housing Grant for buyers of new ECs

Monthly Household Income CPF Housing Grant Amount

Not more than $10,000 $30,000

$10,001 - $11,000 $20,000

$11,001 - $12,000 $10,000


CPF Housing Grant Scheme

Resale or DBSS Flat Exec CondoNew HDB Flat

With the help of

Additional CPF Housing Grant (AHG)($5,000 to $40,000)

CPF Housing Grant (up to $40,000)

Special CPF Housing Grant (SHG)($5,000 to $20,000)

First-timer Citizen Households can buy

Market subsidy

Lower and middle-income households get more help

CPF Housing Grant (up to $30,000)

HDB Loan for new, resale &

DBSS flats


� Helps lower and middle-income citizen families to own their first home (new, resale and DBSS flats)

Additional CPF Housing Grant (AHG)

Average Monthly Household Income

Additional CPF Housing Grant Amount

$1,500 or less $40,000

$1,501 - $2,000 $35,000

$2,001 - $2,500 $30,000

$2,501 - $3,000 $25,000

$3,001 - $3,500 $20,000

$3,501 - $4,000 $15,000

$4,001 - $4,500 $10,000

$4,501 - $5,000 $ 5,000


Special CPF Housing Grant (SHG)

Average Monthly Household

Income

Amount of Housing GrantEligible Flat Types

with SHGAHG SHG Total

$1,500 or less $40,000 $20,000 $60,0002-room standard flats in non-mature estates

$1,501 - $1,750$35,000

$15,000 $50,000 2-room or 3-room standard flats in non-mature estates$1,751 - $2,000 $10,000 $45,000

$2,001 - $2,250 $30,000 $5,000 $35,0003-room standard flats in non-mature estates

� Over and above regular housing subsidies and AHG

� More help for lower-income citizen families to own their first home (new flats only)

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Affordable Homes

� Mortgage instalment is 13% - 26% of monthly household income (below international benchmark of 30% - 35%)

� Most buyers can service loan using CPF contribution, with minimal cash outlay

2-room $104,000 $1,400 $40,000 $20,000 $44,000 $177 13% Nil

3-room $191,000 $2,500 $30,000 - $161,000 $645 26% $70

4-room $300,000 $4,200 $10,000 - $290,000 $1,081 26% $115

5-room $384,000 $5,600 - - $384,000 $1,384 25% $96

Weighted Average 25%

Instalment

Payable By

Cash

Monthly

Instalment

for

Mortgage

Loan

Monthly

Instalment

to Income

Ratio

(DSR)

Flat

Type

Typical

New Flat

Selling Price

1H 2011 *

Median

Household

Income of

Applicants

AHG for

Eligible

Flat Buyers

SHG for

Eligible

Flat Buyers

Nett

Selling

Price

(less

grants)

Note: *Based on new flats offered in non-mature estates in 1H 2011.


Note * Not applicable to DBSS flat buyers with household income of $8,001 to $10,000

FamilySelling Price of New Flat

CPF Housing Grant forResale and DBSS FlatsBasic

Family Grant Higher-Tier

Family Grant*

SC/SC Unchanged $30,000 $40,000

SC/SPR$10,000 Premium

receive $20,000 receive $30,000

� Housing subsidy is a privilege for citizen families

Housing Subsidy Differentiation



� CPF Housing Grant for EC buyers


Note: * Must apply within 6 months of getting Singapore Citizenship or birth of a citizen child


� SC/SPR household can apply* for $10,000 Citizen Top-Up when:

� SPR family member obtained citizenship; or

� Birth of a citizen child

Copyright © 2011 Housing & Development Board Copyright © 2011 Housing & Development Board

It is as simple as…

Financial Planning for Flat Purchase

A

B

C

bility to Pay

udget

redit

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Ability to Pay- Considerations

� A steady income to qualify for a loan

� Ability to make long term repayments

� Financial Commitments


Regular Income

Monthly Expenses

� Typical household expenses

Food, transportation, medical

expenses etc.

� Other expenses

Monthly mortgage installment, utility bills etc.

Tip: Always plan ahead and be ready for the unexpected.



Monthly housing instalment in cash

Utility Bills

Conservancy Charges

Necessity and Groceries

Housing insurance

Loan repayment

Others

Total housing related expenses

Total take-home pay

Less Living/Personal Expenses

Food

Transport

Insurance

Allowance to parents

Credit card payment

Loan repayment

Others

What is left over monthly Vs



Forward

Backwards Price of flat

Price of flat

How much I need

How much I have

Budget- What Forms Your Budget?


Budget- What Forms Your Budget?

Cash Savings

+

Housing loan

+

CPF savings

Budget to buy a flat

=

Tip: Stamp/legal fees can only be paid using your CPF savings and cash

Stamp & Legal FeesRenovationAgents Fees

Etc

+

CPF housing

grant

+


Example: Purchase of Resale Flat

Resale price isresult of negotiation

between buyer and seller

The Sunday Times (4 July 2010)

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Valuation

� Required when buyer takes a housing loan or uses CPF money

� Requested through HDB

� Carried out by professional private valuers licensed by IRAS and members of SISV



Refer to recent transacted prices of comparable flats (found in HDB InfoWEB), not

cash-over-valuation, to avoid over-paying!

Cash-over-valuation

� Arises when buyer pays more than valuation to secure resale flat

� Cannot be paid through loan or CPF money

� Not a requirement by HDB. Flats can transact above, at or below valuation


� Loan amount

� Interest rates (Fixed or Variable)

� Repayment period

Considerations when obtaining a mortgage loan

Credit

Tip: Think about reducing your repayment period to save on interest. But be ready for a higher monthly installment


� Singapore citizen

� Income ceiling

– $10,000 for new & resale flat

– $8,000 for DBSS flat

� Non-ownership of private residential property

� Only one owner-operated market stall / commercial / industrial property

Eligibility Conditions: For HDB Loan


� Eligibility for an HDB loan

� Maximum HDB loan amount

� Maximum repayment period

� Maximum monthly installment

� Cash proceeds to be used

� HLE letter provides buyers an early assessment of:

Credit- HDB Loan Eligibility Letter

Tip: Obtain HLE letter for planning before committing to a purchase


DBSS flat

New flat

Resale flat

Good to have..HLE is required..

Before Buyer exercises OTP

Before Buyer signs the sales & purchase agreement

Before Buyer signs the sales & purchase agreement

Before selling current flat and sourcing for next one

Before selecting flat

Before selecting flat

Credit- HDB Loan Eligibility Letter

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� Instalment capped at 40% of basic monthly income

� Maximum repayment period of 30 years

� Loan ceiling up to 90% financing

� Interest rate (Currently 2.6% per annum)

� Full CPF usage

� Based on financial situation

Credit Assessment

Misconception: Maximum loan approved is based on intended flat purchase


HDB Loan Eligibility (HLE) Application Process


Credit - HDB Loan Eligibility (HLE) letter

1

Apply online via HDB InfoWEB www.hdb.gov.sg/ hle

Print and sign completed HLE application form

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Submit within 7 days:-

HLE application form

Latest 3 months’ payslips

Past 15 months’ CPF contribution history

4

HDB processes application on receipt of complete income documents

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Applicants may be invited for a discussion before HLE letter is granted

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HDB sends HLE letter to applicants


-

Yes

Yes

Yes

Yes

-

Bank Statements

Yes

-

-

-

-

-

Statutory Declaration

----3 mthsUnemployed persons

Yes-YesYes12 mthsOdd Job workers

Yes-YesYes12 mthsCommission-Based persons

Yes--Yes12 mthsRegular part time workers

YesYesYes--Self-employed persons

---Yes3 - 12 mths

Employed persons

CB report

ACRANOA / Audit Firm statement

Past 15 mths' CPF contribution History

Payslips

CA guideline- Documents required

NOA: Notice of Assessment (IRAS) CB : Credit Bureau


� Email to [email protected]

� Deposit into Mydoc@HDB

Submission of documents for HLE application


Food For Thought

� Choose the housing option which best suits your needs

� Plan your finances before committing to flat purchase

- Ability to Pay

- Budget

- Credit

� Buy a flat within your means

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� Eligibility and Procedures

– Buying a new flat

– Buying a resale flat

� Resale Data

– Housing market statistics

– Resale flat prices

� HDB Loan e-Services

– Sales Financial Plan

– Resale Financial Plan

– DBSS Financial Plan

HDB InfoWEB (www.hdb.gov.sg)

Sources of Information


Sharing buying your first flat (nus) 13 jan 2012

Business

housing development

housing development

specialcpf housing grant

regular housing subsidies

resale dbss flats

nonsubsidisedresale

room standard flats

cpf contribution