FAQ #3

(Part of “The Almost Complete Goondu’s Guide to Buying a HDB Flat in Singapore” series.)

Can Permanent Residents apply for HDB flats?

Married PR couples or 2 PR siblings are allowed to apply for HDB resale flats. However, no HDB loan or grants are available for PRs.

Can I use my CPF to pay for my brother’s HDB flat?

If the HDB flat is not under your name, you are not allowed to use your CPF monies for it. Unless you and your brother bought a HDB flat together, you cannot use your CPF to pay for his flat.

If I currently own a private property, am I allowed to buy a HDB flat?

Yes you may. However, you are limited to the resale market, without HDB loan or grants. Also, the HDB flat must be your primary residence. Do note that if you buy a HDB flat, your property tax rate for the HDB will be 4% (owner occupied tax-rate), while your private property will now be taxed at 10%.

As long as you do not rent out the whole unit in the 1st 3 years, you can still apply for permission to sublet the whole unit from the 4th year onwards.

I need to downgrade my HDB. Can I still take a HDB loan?

No you cannot. A 2nd HDB loan will only be issued if your household income is less than $8k (family) or $3k (singles), and you are upgrading (eg. 2rm to 3rm, or 4rm to 5rm etc. Selling a 4Std and buying a 4A is NOT considered upgrading).

If you really need a HDB loan, you can try appealing to HDB or visiting your MP and see if they will write you a letter that might help you. The process is tedious and long and you might still not get a 2nd HDB loan.

What is a Housing Bridging Loan and how do I apply for it?

When you sell your house, you will not get back your CPF money till 1 week after the completion date. However, if you intend to buy and sell at the same time, and you need the CPF money that is currently tied up in your house to pay for your new house, that is where a bridging loan comes in.

A Bridging loan is a bank issued loan usually for a short period of a few months, charged with interest. You cannot use a bridging loan to get cash for paying for Cash over valuations, or the cash component for your deposit. It can only be used to make up the CPF portion of your payment (usually 15% of the purchase price).

Are there any alternatives to taking a bridging loan from the Bank?

If you have enough money in your CPF currently, to pay for your 15% downpayment (and the other 5% in cash), you actually don’t need a bridging loan. Check with your bank if they allow you to prepay part of your loan without penalty, such that when your CPF money is released from the sale of your flat, you still have the option of putting in the extra money into your loan to lower the total amount.

The downside of this though, is your monthly installment payments might be higher than if you had put down a larger downpayment. That might not be a problem however, as you will still have money in your CPF to help with the larger payment.

Can I sell my HDB flat before Minimum Occupancy Period (MOP) is up and buy a private property? Can I just repay the grant from proceeds from the sale?

Unfortunately, it’s not possible, even if you were willing to repay the grant. HDB wouldn’t approve the sale in the first place, so it would never get beyond the 1st appointment. They are pretty strict that way.

You’ll have to wait till your MOP is up before you can put down a deposit for any private property. It doesn’t matter if the private property would only TOP in 5 years. You can only put down a deposit for any private property once your MOP is up.