Planning to buy or sell an HDB flat in Singapore? Understanding the policies that govern these public housing units is essential for making informed decisions about your home. Whether you’re a first-time buyer, looking to upgrade, or considering renting out your property, HDB policies will shape your options at every step.
HDB flats account for over 80% of Singapore’s residential properties, making them the primary housing choice for most Singaporeans. But navigating the rules around eligibility, grants, loans, and resale can feel overwhelming. Each policy exists for a reason—to ensure fair distribution of public housing and maintain affordability for citizens.
This comprehensive guide breaks down everything you need to know about HDB policies. From understanding who can buy what type of flat to navigating the Minimum Occupation Period (MOP) and exploring available grants, you’ll find practical information to help you plan your next move confidently.
Understanding HDB Flat Types and Eligibility
The type of HDB flat you can purchase depends on several factors, including your citizenship status, family nucleus, and income level. Getting familiar with these basic requirements is your first step toward homeownership.
Types of HDB Flats Available
HDB offers several flat types to accommodate different household sizes and needs:
Build-To-Order (BTO) Flats: These new flats are built based on demand and typically take 3-4 years to complete. BTO flats offer the most affordable entry point into homeownership, with prices subsidized by the government.
Sale of Balance Flats (SBF): These are unsold flats from previous BTO exercises or cancelled bookings. They’re ready sooner than BTO flats, usually within 1-2 years.
Resale Flats: Existing HDB flats sold by current owners on the open market. These offer immediate availability and a wider choice of locations, though at higher prices than BTO flats.
Executive Condominiums (ECs): A hybrid between public and private housing, ECs come with condominium facilities but follow HDB rules for the first 10 years.
Citizenship and Family Requirements
Your eligibility for different flat types hinges on citizenship status and household composition:
- Singapore Citizens have access to all flat types and receive the highest subsidies and grants.
- Permanent Residents (PRs) can only buy resale flats or new ECs, not BTO or SBF units. At least one buyer must be a Singapore Citizen if applying as a family.
- Singles aged 35 and above can purchase resale flats or 2-room Flexi flats in non-mature estates.
The concept of a “family nucleus” is central to HDB eligibility. Acceptable family units include married couples, parents with children, and children taking care of parents. Singles under 35 have limited options unless they qualify under the Joint Singles Scheme or Orphans Scheme.
Income Ceilings Matter
HDB imposes income limits to ensure flats go to those who need public housing most:
- For BTO flats, the combined gross monthly household income cannot exceed $14,000 for most flat types, or $21,000 for executive flats and ECs.
- There are no income ceilings for buying resale flats, making this route attractive for higher-income households.
Income ceilings are assessed based on the past 12 months of income for all working members in the household.
Navigating the HDB Loan and Grants Landscape
Financing your HDB flat involves understanding both loan options and the grants available to make homeownership more affordable.
HDB Concessionary Housing Loan vs. Bank Loans
You have two primary financing options when purchasing an HDB flat:
HDB Concessionary Housing Loan: This government-backed loan offers competitive interest rates pegged at 0.1% above the prevailing CPF Ordinary Account interest rate (currently 2.6% as of 2024). The maximum loan-to-value ratio is 85% of the purchase price or valuation, whichever is lower. Only Singapore Citizens can apply for HDB loans.
Bank Loans: These may offer more flexible repayment options and potentially lower initial rates, but they come with fluctuating interest rates tied to market conditions. Bank loans might allow you to borrow more, but you’ll need to meet the bank’s credit assessment criteria.
Most first-time buyers opt for HDB loans due to their stability and lower risk of interest rate spikes.
CPF Housing Grants You Can Tap Into
The government provides several grants to help different groups afford their homes:
Enhanced CPF Housing Grant (EHG): First-time buyers purchasing a BTO or resale flat can receive up to $80,000, depending on household income. Lower-income families receive higher grant amounts.
CPF Housing Grant for Resale Flats: Provides up to $50,000 for first-timers buying resale flats within certain criteria, such as remaining lease that can cover the youngest buyer until at least age 95.
Proximity Housing Grant (PHG): Receive up to $30,000 if you buy a resale flat near or with your parents or married child. This grant encourages multi-generational living.
Step-Up CPF Housing Grant: For families upgrading from smaller flats, this grant of up to $15,000 helps bridge the price gap.
These grants can be combined, potentially reducing your out-of-pocket costs significantly. However, grants come with conditions, such as income limits and occupancy requirements.
The Minimum Occupation Period (MOP) Explained
The Minimum Occupation Period is one of HDB’s most important policies. It affects when you can sell or rent out your flat.
What is MOP and Why Does It Exist?
MOP requires flat owners to physically occupy their flat for a minimum period before they can sell it or rent out the entire unit. Currently set at 5 years for most flats, MOP ensures that HDB flats serve their primary purpose: providing affordable housing rather than functioning as investment properties.
The 5-year countdown begins from the key collection date for new flats or the completion of resale for existing flats.
What You Can and Cannot Do During MOP
During the MOP, you can:
- Rent out individual rooms (with HDB approval)
- Apply for HDB’s Home Protection Scheme
- Carry out interior renovations
You cannot:
- Sell your flat on the open market
- Rent out the entire flat
- Purchase another HDB flat or Executive Condominium
- Buy or inherit private property (with some exceptions)
Violating MOP rules can result in financial penalties and forced sale of the property.
Planning Your Next Move
If you’re approaching the end of your MOP and considering upgrading, start planning early. Research resale prices, assess your financial position, and understand that you’ll need to sell your current flat before or concurrently with purchasing a new one (unless you meet specific exemptions).
Some homeowners strategically time their upgrades to take advantage of market conditions while fulfilling their MOP obligations.
Buying a Resale HDB Flat: What You Need to Know
The resale market offers flexibility and immediate availability, but it comes with its own set of considerations.
The Resale Process Step-by-Step
- Obtain an HDB Flat Eligibility (HFE) Letter: This confirms your eligibility and the amount of CPF Housing Grant you qualify for.
- Secure Financing: Get an Agreement in Principle (AIP) from HDB or your bank to know your borrowing capacity.
- Find Your Flat: Work with property agents or browse HDB’s resale portal. Consider factors like location, remaining lease, and renovation condition.
- Submit Option to Purchase (OTP): Once you’ve agreed on a price with the seller, the seller grants you an OTP, typically valid for 21 days. You’ll pay an option fee (usually 1% of the purchase price).
- Exercise the OTP: Within the option period, pay the option exercise fee (another 4-9% of the purchase price, depending on your financing).
- Complete the Sale: HDB facilitates the resale transaction. The entire process typically takes 8-10 weeks from exercising the OTP.
Valuation and Cash Over Valuation (COV)
All About HDB conducts a valuation to determine the flat’s market value. If you’re taking an HDB loan, you can only borrow based on this valuation, not the agreed purchase price.
If the purchase price exceeds the valuation, you’ll need to pay the difference in cash. This is known as Cash Over Valuation. Budget for this possibility when house hunting in competitive markets.
Lease Decay and Its Impact
All HDB flats come with 99-year leases. As flats age, their remaining lease decreases, which can affect both valuation and your ability to use CPF for the purchase.
Key considerations:
- CPF usage is pro-rated based on how much of the lease remains
- You can only use your CPF if the remaining lease can cover the youngest buyer until at least age 95
- Older flats may appreciate more slowly or even depreciate as they approach the end of their lease
Factor in lease decay when choosing between a newer, more expensive flat and an older, cheaper one.
Renting Out Your HDB Flat
HDB allows flat owners to rent out their properties under specific conditions, providing an opportunity for passive income or flexibility during temporary relocations.
Whole Flat vs. Bedroom Rental
Whole Flat Rental: You can only rent out your entire flat after fulfilling the MOP. You must obtain HDB’s approval and inform them of your tenant’s details. There are restrictions on the minimum rental period (at least 6 months for HDB and executive flats).
Bedroom Rental: You can rent out individual rooms at any time, but you must continue to occupy the flat and seek HDB’s approval. The minimum rental period is 6 months per tenant.
Who Can Rent Your Flat?
Both Singapore Citizens, PRs, and foreigners can rent HDB flats. However, the entire household occupying the flat cannot consist solely of non-citizens if you’re renting out the whole flat.
Important Rental Regulations
- Register your tenancy with HDB and keep records updated
- Owners are responsible for ensuring tenants comply with HDB rules
- Subletting without approval can result in fines up to $5,000 and/or imprisonment up to 6 months
- Check your tenant’s background and maintain clear rental agreements
Many landlords work with property agents to manage these requirements and screen tenants properly.
Special Housing Schemes for Different Life Stages
HDB offers several specialized schemes to accommodate diverse housing needs throughout different life stages.
The Singles Grant and 2-Room Flexi Scheme
Singles aged 35 and above can purchase 2-room Flexi flats in non-mature estates under this scheme. These flats come with shorter leases (15 to 45 years), making them more affordable while providing adequate housing for the buyer’s lifetime.
Singles can also purchase resale flats (any flat type, any estate) without restrictions once they turn 35.
The Silver Housing Bonus
Senior citizens aged 55 and above who right-size to a smaller flat can receive the Silver Housing Bonus of up to $30,000. This scheme encourages seniors to monetize their housing assets while moving to more manageable homes.
Joint Singles Scheme
Two or more singles can jointly purchase a resale flat if all applicants are at least 35 years old. This provides housing solutions for friends or siblings who wish to live together.
Community Care Apartments
These studio apartments cater to active seniors who wish to age in place with community support. Located near town centers with easy access to amenities, they come with elderly-friendly features and a senior activity center.
Looking Ahead: Your HDB Journey
Understanding HDB policies empowers you to make smart decisions about one of life’s biggest investments. Whether you’re planning to apply for your first BTO, upgrade to a larger resale flat, or rent out a property for passive income, knowing the rules helps you avoid costly mistakes and maximize available benefits.
Take time to assess your financial readiness, family needs, and long-term goals. Use HDB’s online calculators to estimate your borrowing capacity and grant eligibility. Consider speaking with HDB’s customer service officers or attending their home ownership talks for personalized guidance.
Remember that policies can change, so always verify current requirements on HDB’s official website before making major decisions. With careful planning and a solid understanding of the system, you can successfully navigate your HDB journey and secure a home that meets your needs for years to come.
