If you’re looking to apply for a new HDB flat (BTO or Open Booking) or buying from the resale market, it is essential to secure an HLE. In this article, we will cover the application process for HLE and the loan eligibility conditions, and when you need to apply for it.
What is an HDB Loan Eligibility Letter (HLE)?
It is an in-principle approval for a concessionary housing loan from HDB based on your information submitted during the application. Your HLE will indicate the maximum loan amount you are eligible for, the breakdown of monthly instalments and the repayment period.
HLE is valid for 6 months from the date of issue. If you didn’t manage to secure a flat of your choice within that time frame, you may apply for a new HLE letter a week before the expiration date.
When do you need to apply for an HDB HLE?
It is advisable to apply before you start your home search, as it helps you understand the loan amount you’re eligible for and you can work out the budget of your purchase without overstretching yourself for the monthly instalments when you become the owner of the flat.
You will need a valid HLE before you book a new flat from HDB (BTO, SBF or Open Booking), or obtain an Option to Purchase from a seller if you are purchasing a resale flat, or apply for transfer of ownership of an HDB flat.
1. HDB Loan Eligibility Conditions
There are several conditions you need to fulfil to be eligible for an HDB loan.
Citizenship | At least 1 buyer is Singapore Citizen |
Household status | All applicants and essential occupiers* listed in the application: - Have not previously taken 2 or more housing loan from HDB - Have taken 1 housing loan from HDB and the last owned property is not a local or overseas private residential property Intended flat purchase for the following profiles:
*An essential occupier is a family member who has enabled the applicant(s) to qualify to buy a flat. They do not have ownership of the flat and must remain in the flat application, as well as during the minimum occupation period (MOP) after the flat purchase. |
Monthly household income ceiling | Your average gross monthly household income must not exceed:
|
Ownership/ interest in property in Singapore or overseas other than HDB flat | All applicants and essential occupiers listed in the application:
^ Private residential properties include but are not limited to houses, buildings, land, Executive Condominium (EC) units and privatised HUDC flats. You are deemed as having acquired interest in a property which is:
|
Remaining lease of the flat | The loan amount will depend on the extent the remaining lease can cover the youngest buyer to the age of 95. Covers 95 years or more - Up to 85% of the purchase price for new flat / Up to 85% of the resale price or flat value, whichever is lower for resale flat. Covers less than 95 years - Pro-rated from the 85% LTV limit, based on the extent the remaining lease can cover the youngest buyer till the age of 95. Loan period Shortest of:
|
source: HDB
2. Credit assessment criteria
source: HDB
Besides meeting the eligibility conditions, flat buyers have to fulfil credit assessment criteria to apply for an HDB housing loan. Do take some time to build up your finances and work records if you do not meet the criteria for an HDB housing loan.
3. How to apply for an HLE letter
Good news, you won’t be having a hard time as HDB has made the application process simple:
- Ensure all applicants have a valid Singpass
- *Prepare the list of income and supporting documents in either PDF or JPG format
- Login to the portal
- Follow the steps and complete the application
HDB will usually get back to you within 14 days after the date of application, provided that the full set of documents is submitted.
*List of income and supporting documents to prepare:
- An employee with CPF contributions
Three months’ payslips
Latest 15 month’s CPF contribution history
- An employee without CPF contributions
6+ months’ payslips
Latest 6+ months’ bank statements/passbook
- Self-employed
Latest Notice of Assessment from IRAS or Certified Annual Statement of Accounts from an auditing firm
Credit Bureau report
Latest 6+ months’ bank statements/passbook
- Commission-based, or part-time worker
6+ months’ commission statements or payslips
Latest 15 month’s CPF contribution history
Credit Bureau report
Latest 6+ months’ bank statements/passbook
- Odd job worker
Latest Notice of Assessment from IRAS or a recent letter from the employer certifying job designation, commencement date, and commission/salaries for 6+ months
Latest 15 month’s CPF contribution history
Credit Bureau report
Latest 6+ months’ bank statements/passbook
- Unemployed
Income proof for the preceding month(s) from the previous employer stating your gross monthly income and last day of service
Latest 15 month’s CPF contribution history
You can track the status of your application simply by logging in to My HDBPage > My Flat > Application Status > HLE
4. How much is the downpayment for HDB?
Following the latest cooling measure announced on Dec 21, the downpayment required for HDB will be 15% of the purchase price (can be fully paid in CPF if sufficient) if you are taking up an HDB loan. It is worth noting that if you do not have sufficient CPF to cover the downpayment, you may pay in cash for the remainder. Do exercise prudence and purchase a flat that is within your budget.
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