If you plan to buy an HDB flat in 2023 and have decided to apply for an HDB loan for your purchase, obtaining an HDB Loan Eligibility (HLE) letter will be a crucial step.
In this article, we will guide you through the application process and eligibility criteria for an HDB loan. We will also cover how to apply for an HDB loan, check your HLE application status, and provide information on the HDB down payment.
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What are the application requirements for an HDB Loan Eligibility (HLE) Letter?
The main difference between a bank loan and an HDB concessionary loan is the eligibility criteria you must meet. While a bank loan typically only requires a healthy credit score, an HDB loan has several conditions you must fulfill, known as HDB Loan Eligibility.
If you are applying for an HDB loan for the first time, you need to meet the following criteria as required by HDB:
HDB Loan Application Criteria: Citizenship
- At least one Singapore Citizen (SC) buyer
HDB Loan Application Criteria: Household Status
- Have not taken two or more housing loans from HDB previously.
- Have taken one housing loan from HDB and the last property owned is not a private residential property (local or overseas), including a HUDC flat, property acquired by gift, property inherited as a beneficiary under a will or as a result of the Intestate Succession Act, or property owned/acquired/disposed of through nominees.
HDB Loan Application Criteria: Income Ceiling
| Household | Income Ceiling |
| Singles | $7,000 for singles buying a 5-room or smaller resale flat, or a 2-room new flat in a non-mature estate under the Single Singapore Citizen (SSC) Scheme |
| Families | $14,000 |
| Extended Families | $21,000 |
HDB Loan Application Criteria: Ownership
- Must not have owned or disposed of any private residential property in the 30 months before applying for an HDB loan.
- Applicants must not own any private residential property (local or overseas), including property acquired by gift, inherited as a beneficiary under a will or as a result of the Intestate Succession Act, or owned/acquired/disposed of through nominees.
- Applicants must not own more than one market/hawker stall or commercial/industrial property. If they own one, they must be operating the business themselves and have no other sources of income.
HDB Loan Application Criteria: Remaining Lease
The loan amount will depend on the remaining lease covering the youngest buyer until the age of 95.
⚠️Please note that if your income stream is not from a salary—for example, if you do gig work or are a freelancer—your monthly income will be subject to a “haircut,” meaning only 70% of your income will be considered.
HDB does not consider the following as part of the monthly household income:
- Alimony or maintenance fees
- Bonuses
- Claims/reimbursements/expenses
- Director’s fees
- Dividend income or interest from deposit accounts
- Income from ad hoc overtime
- National Service allowance
- Income of occupants
- Overseas cost of living allowance
- Pension
- Rental income
- Scholarship overseas allowance
If you meet all the HDB loan eligibility criteria, you can proceed to apply for an HDB loan. If you are still unsure or want to confirm your eligibility, you can do so by filling out a questionnaire on the HDB website.
⚠️Please note that the loan quantum you can receive will be determined by the following factors:
- Loan-to-Value (LTV) ratio: This is the maximum loan amount you can get for a specific property. The ratio represents a percentage of the property’s value, which is 80% for HDB-granted loans.
- Mortgage Servicing Ratio (MSR): This refers to the portion of your monthly income used to repay your home loan. The MSR is capped at 30% of your monthly income and applies only to housing loans for HDB flats and Executive Condominiums (ECs).
- Total Debt Servicing Ratio (TDSR): This refers to how much of your monthly income can go towards servicing your monthly debt. It includes all debt obligations, such as credit card bills, car loans, student loans, and any other loans—including the one you are applying for. Your TDSR should be less than or equal to 55%.
HDB Loan Calculator
By using the HDB loan calculator, you just need to enter the amount you expect to use for purchasing an HDB flat to get an idea of your approximate budget. For quicker use, you can retrieve information using Singpass. Before using the calculator, you can also log in to import the details from your HDB Loan Eligibility letter.
What is an HDB Loan Eligibility (HLE) Letter?
In short, an HDB Loan Eligibility (HLE) Letter is a document that states the loan amount HDB is willing to lend you. In addition, the document will also specify the following:
- Repayment period
- Monthly installment amount
- Flat type
- Flat lease
- Expiry date of the letter
The loan amount, along with your CPF/cash savings and considering your housing grants, will determine your HDB flat budget.
The loan amount you can get from HDB depends on three key factors:
- Your age
- Your income
- Your financial situation
If you want to buy a Build-To-Order (BTO) flat, you need to obtain an HLE letter before booking a new flat. If you are buying a resale flat, you need to get the HLE letter before signing the Option to Purchase (OTP). Please note that the HLE letter is valid for only six months.
How to apply for an HDB concessionary loan?
You need to apply for the HDB Loan Eligibility (HLE) letter online via the HDB website. During the application process, you will need to provide personal information and proof of income.
After receiving the HLE letter from HDB, you will need to upload the necessary documents to the HDB website, and then you’re all set! HDB will typically respond within 14 days with the outcome. You can check your HLE application status through the MyHDB portal.
Depending on your employment type and CPF contribution status, here is a list of documents you need to upload,
- Employees with CPF contributions
- Payslips for the last 3 months
- CPF contribution history for the last 15 months
- Employees without CPF contributions
- Payslips for the last 6 months or more
- Credit Bureau report
- Bank statements/passbook for the last 6 months or more
- Self-employed persons
- Latest Notice of Assessment from the Inland Revenue Authority of Singapore (IRAS) or a certified annual statement of accounts from an audit firm
- Credit Bureau report
- Bank statements/passbook for the last 6 months or more
- Commission-based or part-time work
- Commission statements or payslips for the last 6 months or more
- CPF contribution history for the last 15 months
- Credit Bureau report
- Bank statements/passbook for the last 6 months or more
- Gig economy workers
- Latest Notice of Assessment from IRAS or a recent letter from the employer certifying job title and salary for the last 6 months or more
- CPF contribution history for the last 15 months
- Credit Bureau report
- Bank statements/passbook for the last 6 months or more
- Unemployed persons
- Income proof for the month preceding unemployment from the previous employer, stating your gross monthly income and date of termination
- CPF contribution history for the last 15 months
If your application is successful, HDB will contact you regarding subsequent matters, such as whether you wish to repay the loan with cash or savings from your CPF Ordinary Account (CPF OA).
How to check the status of your HDB Loan Eligibility application?
After completing your HLE application, you will receive an HLE application number. You can log in to the HDB website using your NRIC or the HLE application number to check the status.
What is the interest rate for an HDB loan?
HDB lists the current interest rate for its loans on its website. As of now, the current rate is 2.6%. The HDB interest rate is pegged at 0.10% above the prevailing CPF Ordinary Account (OA) interest rate and may be adjusted in January, April, July, and October.
It is worth noting that the interest rate for the HDB concessionary loan has remained unchanged for a considerable period. This stability is attractive to homeowners, who can set aside a fixed amount for repayment each month without worrying about sudden rate hikes.
If you are unsure which type of loan to apply for, you can review a comparison of HDB loans versus bank loans.
Related Articles:
What is the down payment for an HDB loan?
HDB lists the payments you need to make on its website. If you opt for an HDB loan and get the maximum Loan-to-Value (LTV) ratio of 80%, the down payment for the HDB flat will be 20% of the purchase price. You can pay the down payment using savings from your CPF Ordinary Account (OA) and cash. Note that the down payment amount can significantly impact your home-buying decision.
For example, if you and your spouse are considering buying an HDB flat and find that your combined CPF OA savings are only S$45,000, it would be more realistic to choose a flat not exceeding S$300,000, unless you have sufficient cash on hand. If you choose a more expensive flat, you will have to pay the remaining portion of the down payment in cash.
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