HDB Resale Flat: 5 things to consider before you buy

11 Mar 2022

So you want to buy hdb resale flat but don’t want to wait years for a brand-new Build-to-Order (BTO) flat to be developed. What is your other option? Purchase a resale HDB flat.

We’ll go through the benefits of buying resale flat, the available schemes, eligibility, how to acquire one, and more in this article.

Let’s get started!

1.What is an HDB Resale Flat?

HDB flats that are currently held by someone else are known as resale flats. They’ve been occupied for at least the MOP (Minimum Occupation Period), which is usually five years.

When you buying resale flat, you are assuming ownership from the prior owner. That means you’ll be able to get your keys as soon as the transaction is finished.

Resale apartments, unlike brand new BTO flats, do not come with a new 99-year lease. The longer an unit has been on the market, the less years it has left on its lease. When deciding whether a resale property is worth the money, it’s crucial to examine how many years the lease has left.

It’s also worth noting that the cost of renovating a resale property is typically more than upgrading a BTO flat because you’ll have to remove or change prior owner’s upgrades.

2.Benefits of Picking a Resale Unit 

Despite not receiving a brand new flat, there are some clear advantages to buy hdb resale flat over a BTO flat:

PRs Can Buy Resale HDB Flats

While BTO flats are only reserved for Singaporeans, PRs can buy resale HDB flats

Resale Flats are Usually More Spacious

New BTO flats tend to be smaller than older flats of the same type. Resale flats tend to be more spacious with bigger bedrooms.

Shorter Waiting Time for Resale Flats

You can move into a resale flat immediately after the sale is completed. The resale procedure typically takes under three months. By contrast, the waiting time for a BTO flat is typically 2.5 years from the date of application.

No Need to Ballot for Resale Units

Getting a BTO flat is largely a matter of luck. First, you need to successfully ballot for a flat in a development. When you have successfully been selected, your ability to pick a unit you like will depend on your queue number.

With resale flats, there is no balloting process. As long as you and the seller come to an agreement, you can buy the unit, provided of course that you satisfy HDB’s eligibility requirements.

More Locations to Choose from

BTO flats tend to be launched in non-mature estates such as Punggol and Sengkang, typically far from the city centre. While there are some BTO launches in mature estates, these are always highly sought-after and therefore difficult to successfully ballot for. Resale flats give you the freedom to get a flat in the location you want, especially if you want to live closer to your parents.

More Housing Grants for HDB Resale Flats (in Addition to EHG)

With the new EHG, the maximum grant amount that first-time BTO flat buyers can receive is $80,000. However, first time resale HDB flat buyer can receive even more grants compared to BTO flat buyers. In addition to the $80,000 grant amount from EHG, resale flat buyers are also eligible for $50,000 (Family Grant) and $30,000 in grants. This means the total grant amount that resale flat buyers can get is $160,000. 

No Income Ceiling for Resale Flat Buyers

Unlike BTO flats, which has a monthly household income ceiling limit ($14,000 for families, $21,000 for extended/multi-generation family flats and $7,000 for singles), there’s no income ceiling limit for resale HDB flats. 

3.Financing Your HDB Resale Flat: How to Pay for Your New Home

The savings in your CPF Ordinary Account (OA) can be used to pay for your flat, as well as your monthly mortgage instalments.

If you are taking an HDB housing loan, you are required to drain your CPF OA balance or opt to retain up to $20,000 savings in your OA. For flats with a balance lease of under 60 years, there might be withdrawal limits on your CPF OA.

The two main loan options for buying a resale flat: an HDB loan, or bank loan. Generally, those with less cash flow opt for HDB loans as the loan-to-value (LTV) ratio is 90%, meaning you only need to pay a 10% downpayment upfront.

Those with more cash/CPF savings consider bank loans too: although it requires at least 25% downpayment (thanks to a 75% LTV), the interest rates are usually more attractive than HDB’s.

4.HDB Resale Flat Eligibility Criteria: Who Can Apply?

To be eligible to buy HDB resale flats, you must check all the boxes:

1.At least one Singaporean citizen or two Singapore Permanent Residents listed in the flat application

2.At least 21 years and above if you’re buying in an approved family nucleus, or 35 years if you’re buying as a single

3.Within the Ethnic Integration Policy and Singapore Permanent Resident quota of the block/neighbourhood

4.Not own any other residential properties or any houses/buildings/land whether locally or overseas, or have disposed of them in 6 months before the resale flat application.

5.Is There a Minimum Occupation Period (MOP) for HDB Resale Flats?

Yes. Besides the eligibility criteria, the main regulation resale flat buyers need to worry about is the Minimum Occupation Period (MOP), which is typically five years from the key collection date.

During the MOP, the buyer is expected to live in the flat and is not allowed to rent out the entire unit. Rental of rooms in the unit is permitted so long as the buyer continues to live in the flat.

Got any more questions about buying hdb resale flat? ELPIS is here to help.

Elpis is one of the best reviewed interior designers in Singapore. We also provide home renovation, condo interior design and HDB interior design services, as well as renovation package for homeowners in Singapore. Elpis will help you utilize your resources to the maximum and enable you to have the house of your dreams. So what are you waiting for, contact Elpis now!

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