This post will be a step by step guide to applying for a BTO. (coming from someone who just did it and found the entire process incredibly annoying). Terms requiring definitions are in bold.
BTO: Built To Order flat – our govt is into these now because there’s not enough housing for everyone, so most new housing is built, as opposed to bought from someone else.
-1. Applying for a flat
You can sign up for news releases from HDB to be notified whenever they release new flats. LZ and I are going for mature estates because of their accessibility. This makes a flat in a mature estate about $100,000 more expensive than a similar flat in a new estate.
Mature estates: Places like Toa Payoh, Bukit Merah, Bishan, etc.
New estates: Places like Seng Kang, Punggol, other out of the way towns that are just being developed.
NB: Applying to a mature estate automatically disqualifies you from the Special CPF Housing Grant, assuming you did not meet the income ceiling in the first place.
Moral of the story: Apply early, like when you are a student and do not yet have an income. It could mean up to $20,000 off your flat because the govt deems you destitute.
This can be done online, and very easily too. Each application only costs $10, which you can pay for by credit card. This will be the first of many times you part with your money – the most painless too. It’s like playing a TV gameshow, like Who Wants to be a Millionaire, or the Price is Right, only that after each round, you are guaranteed to lose more money instead of winning more money.
0. Getting a ballot number
We applied solely for mature estates, and only got a reasonable ballot number on the FOURTH attempt.
Reasonable ballot number: Only exceeds the total number of flats by < 100 so there is a non-zero possibility of your being able to choose a flat.
NB: A 4-room flat nowadays is on average, about 93m². This figure is smaller in ECs and other private condominiums.
When you’ve got your reasonable ballot number, HDB will send you a package containing details as to loan packages and other flat details.
1. The Booking and Flat Selection Appointment
The next step is your booking appointment. You are responsible for checking which flats are available online before going to your booking appointment – if your ballot number exceeds the total number of flats, there may be no flats left or at least no good ones left.
Documents to prepare for your booking appointment:
1) Cheque for $2000 made out to the ‘Housing Development Board’. This is your option fee.
– You DO NOT need to bring the cash for the down payment at this point.
2) Other identification documents like your IC/birth certificate/passport
3) Past 3 months payslip dated from the month of your application (NOT the month of your Flat Selection appointment!)
4) Past year’s CPF contribution dated from the month of your application
Roughly about the period of your flat selection, you should apply for the Housing Loan Eligibility (HLE) Letter if you are intending to get a loan from HDB as opposed to a bank.
Implications: Taking a loan from HDB minimizes your down payment to 10% of the purchase price of the flat (or about $50,000), which you can pay in entirety from your CPF Ordinary Account. Taking a loan from a bank makes your down payment 20% of the purchase price, out of which 15% can be paid for using your CPF Ordinary Account, the other 5% in cash.
This point is pretty much where we are right now. I’ll update this post as we go along, assuming we get an apartment on Sunday. Fingers crossed!
2. Exercising your Option/Signing the Agreement for Lease
UPDATE: We did get our flat! About 1.5 months after your flat selection is your appointment to exercise your option, (i.e. when you fork out for the down payment)
You’ll get an official letter from HDB that looks like this:
Telling you exactly how much you need to fork out either via your CPF or your own bank. Because we’re first timers and young (you have to be less than 30 years old) we qualified for the Staggered Downpayment Scheme which allows us to pay only 5% as a deposit and the other 5% later. You can see that HDB has no problems making up more fees (Lease Stamp Fee, Conveyancing Fee) so that even the 5% grows to become pretty exorbitant. What on earth is a lease stamp fee and why does it cost me nearly $10,000? And of course these fees are not listed in any of the online walkthroughs HDB has for buying a flat so you have no way of correctly estimating how much you owe when you sign your lease agreement.
Documents you have to bring to exercise your option
1) Last 3 months’ payslips for all buyers dated from the month of your lease signing appointment UPDATE: This is not necessary.
2) Most recent CPF statement you can print from www.cpf.gov.sg UPDATE: This is not necessary either. HDB can access your CPF balance.
3) Cheque for outstanding balance you have to pay (the figure you see in the picture, less the total amount in your CPF ordinary accounts)
4) Other identification documents like your IC/birth certificate/passport
I’m just going to bring a blank cheque there and let them tell me how much I owe. The $2000 option fee you paid in Part 1 can be applied to the down payment as well. I think we used all our CPF money and they still had to refund us $ from our option fee.
5) Your bankbook and a photocopy of the page with the account number so they can refund anything that remains of the $2000 option fee to your account
3. Key collection
This will be updated in Nov 2017 or Nov 2018, if this blog is still alive then! But seriously, no more going down to HDB between the lease signing and when the flat is ready! They’re pretty good at getting out of your hair it seems.