Are you looking to buy your dream HDB flat?
Here’s some exciting news for all prospective HDB flat buyers!
As of 9 May 2023, the Housing and Development Board (HDB) has introduced the all-new HDB Flat Eligibility (HFE) letter to replace the old HDB Loan Eligibility (HLE) letter.
In this blog post, we’ll dive into what the HFE letter is all about and guide you on how to obtain one.
What Is an HDB Flat Eligibility (HFE) Letter?
This letter plays a crucial role in determining your eligibility to purchase a new or resale HDB flat, receive CPF housing grants, and secure an HDB housing loan.
Here are some information you can expect to find within it:
Eligibility for HDB Flat Purchase:
The HDB Flat Eligibility (HFE) Letter primarily serves as a confirmation of your eligibility to purchase an HDB flat. It will specify whether you are eligible to buy a new or resale flat based on various criteria, such as your citizenship status, family nucleus, income ceiling, and ownership of other properties.
CPF Housing Grants:
In addition to determining your eligibility to purchase a flat, the HFE Letter also provides information about the CPF housing grants you may be eligible for. These grants are intended to assist homebuyers in financing their HDB flat purchase. The HFE Letter will indicate whether you qualify for any CPF housing grants and specify the amount you are eligible to receive.
HDB Housing Loan:
If you require financial assistance to purchase an HDB flat, the HFE Letter will also inform you about your eligibility for an HDB housing loan. This loan is offered by the HDB to eligible buyers and comes with favorable interest rates. The HFE Letter will indicate whether you meet the criteria for an HDB housing loan and specify the loan amount you are eligible to receive.
Resale Levy/Premium for Second-Timers:
For individuals who have previously bought a subsidised flat from the HDB and are considering purchasing another one, the HFE Letter will also provide information about the resale levy or premium. Second-timers are required to pay this fee when they purchase another subsidised flat. The HFE Letter will specify the amount of the resale levy or premium that you will need to pay upon the purchase of your new flat.
Source: HDB
Starting from 9 May 2023, the process of assessing eligibility for HDB flat purchases, CPF housing grants, and HDB housing loans has been simplified with the introduction of the HDB Flat Eligibility (HFE) application.
This streamlined application combines all the necessary assessments into one, allowing HDB to retrieve personal information from MyInfo for eligibility evaluation.
It is now mandatory for flat buyers to possess a valid HFE letter when applying for a flat during sales launches or open bookings, or when obtaining an Option to Purchase (OTP) from a seller and submitting a resale application to HDB.
With the transition from the Home Loan Eligibility (HLE) to the Home Flat Eligibility (HFE) application, there are notable changes in the income assessment process.
The key change is the standardization of the income assessment period to 12 months, compared to the previous three or six months for HLE. This means that when evaluating an applicant’s income for eligibility purposes, HDB will consider the average income over the past 12 months, provided that the income data is available for the entire period.
This change aims to provide a more comprehensive and accurate assessment of an applicant’s financial situation.
Here are the new income assessment guidelines for the Home Flat Eligibility (HFE) application:
- Period of income assessment: 12 months
- End of assessment period: Two months preceding the month of HFE letter application
- Income components considered: All components from employment or trade, except bonuses.
For example, if a person applies for an HFE letter in July 2023, the assessment period will be from June 2022 to May 2023. He/She also needs to be working at the point of the HFE letter application, for his/her income to be considered for an HDB housing loan and the Enhanced CPF Housing Grant.
When Do You Need the HDB Flat Eligibility (HFE) Letter?
New flats:
The letter must be obtained before the Build-to-Order (BTO), Sales of Balance Flat (SBF) sales launch, or open booking.
Resale flats:
The HFE letter is necessary before obtaining an Option to Purchase (OTP) from the seller and submitting the resale application.
For those who have applied for a BTO, SBF, or open booking flat before 9 May 2023, they will not need an HFE letter. Instead, they will be invited to apply for an HDB Loan Eligibility (HLE) letter.
May 2023 Sales Exercise:
You will need to obtain a preliminary HFE assessment before applying for a flat. After completing the preliminary assessment, you will need to apply for the HFE letter within 30 days and submit supporting documents to HDB before booking a flat.
Future Sales Exercises from August 2023 onwards:
A valid HFE letter will be required to apply for an HDB flat.
Source: HDB
For Resale Flats Buyers:
If you have a valid Intent to Buy (ITB) and a valid HDB Loan Eligibility (HLE) letter for an HDB housing loan, you may proceed to obtain an OTP from the flat seller and submit your resale application without an HFE letter.
Source: HDB
How to Apply for the HDB Flat Eligibility (HFE) Letter
Applying for the HDB Flat Eligibility (HFE) letter involves two essential steps, both of which must be completed within 30 days of each other.
Here’s a guide on how to apply for the HFE letter:
Step 1: Complete the Preliminary HFE Check
- Log in to the HDB flat portal using your Singpass.
- The portal will extract your personal particulars from Myinfo, but you’ll still need to provide additional information.
- Fill in the particulars of all flat applicants and occupiers.
- Declare any interest you may have in local and/or overseas private property.
- Indicate your intention to take up a housing loan.
- Based on the information provided, you will receive an instant preliminary assessment of your household’s eligibility for flat purchase, CPF housing grants, and HDB housing loan.
Step 2: Apply for an HFE Letter
- Once the preliminary HFE check is completed, all applicants and occupiers should proceed to fill out the HFE application within the HDB flat portal using their Singpass.
- During the application process, you will be presented with a selection of housing loan packages from HDB and participating financial institutions (FIs).
- Choose either to confirm your eligibility for an HDB housing loan or apply for an In-Principle Approval (IPA) for a housing loan from FIs.
- Upload the required supporting documents and provide any additional information before the specified due date.
- Confirm your HFE application details.
After completing the HFE application, HDB will notify you through SMS regarding the availability of your HFE letter details on the HDB Flat Portal. Generally, you can expect to receive this notification within 21 working days.
The HFE letter, once obtained, remains valid for six months.
However, it’s important to note that during peak periods, such as approaching a sales launch, the processing time may be longer, and you might receive a confirmed outcome beyond the standard 21 working days.
Therefore, it is advisable to apply for the HFE letter early to allow ample time for processing and avoid any potential delays.
Example of how your HFE letter will look like:
Source: HDB
Conclusion
The introduction of the HDB Flat Eligibility (HFE) letter and the integrated HDB Flat Portal marks a significant improvement in the homebuying process for first-time buyers.
These changes, effective from 9 May 2023, streamline the application process, providing a more seamless experience and alleviating anxieties associated with navigating the complexities of home ownership.
What are your thoughts on the HFE letter and the new integrated HDB Flat Portal?
If you are planning to purchase, move or upgrade and wish to assess your financial situation or have a safe property plan for the future, do contact us for a non-obligatory sharing session.
Wondering if it’s the right time to buy, sell, or wait it out?
These decisions can be tough, and there isn’t a one-size-fits-all answer.
But don’t worry, that’s where we come in!
At Let’s Talk Property, we are here to provide clarity to you and guide you step-by-step in your real estate journey!
Whether you’re a first-time buyer or a seasoned investor, we hope to partner with you to create a clear plan that’s tailored to your unique needs and provide objective guidance to help you make the best real estate decision.
So, if you’re looking to buy, sell, or just want to chat about your real estate options, we’re here for you!
With our extensive on-the-ground experience, you can trust us to provide a top-notch real estate experience that’s both informative and stress-free.
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Best Regards,
Let’s Talk Property
Dillon @ 9389 1992
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