You’ve been on the hunt for a resale HDB property for months, and finally, you found the perfect one! To make sure you’ll get the flat you want, you asked the seller for an Option to Purchase (OTP). However, you found out that the seller can’t grant an OTP unless you have a valid HDB Loan Eligibility (HLE) Letter from HDB.
An HLE Letter is a prerequisite for applying for an HDB flat, whether new or from the resale market. Thankfully, it’s easy to obtain one. Here’s a simple guide to obtaining an HLE letter, what it is for, and the eligibility criteria to get one.
What is HDB Loan Eligibility?
HDB Loan Eligibility (HLE) is a list of criteria set by the Housing Development Board (HDB) to properly assess each candidate applying for an HDB housing loan. This set of criteria enables HDB to keep flat values consistent. As a result, eligible candidates can purchase affordable, government-subsidized properties.
For instance, one of the HDB Loan Eligibility criteria is an income ceiling of S$14,000 for families (or S$21,000 for extended families). This keeps high-earners from inflating property values. It also means that HDB will not grant flats to too-low income earners who have a high risk of defaulting on the loan.
The HLE guidelines will help HDB grant HDB loans only to ideal buyers. In doing so, they can limit purchases, control property construction speeds, and maintain consistent property prices.
On top of the HDB home loan eligibility guidelines, you also need to pass the credit assessment criteria. If you are eligible for both, you can then apply for an HDB Loan Eligibility (HLE) Letter.
Take a look at this illustration for a quick reference for the credit assessment criteria:
How HDB Loan Eligibility Letter Works and Why It’s Necessary?
HDB Loan Eligibility (HLE) Letter is proof that the HDB has given you approval for a housing loan. It means you qualify for an HDB loan based on the documents you’ve submitted. It’s also a requirement when you want to apply for an HDB concessionary loan.
Your HLE Letter will have the following details:
- The maximum loan amount you can borrow
- Monthly installments
- Repayment period
- Flat type
- Flat lease
So how does it work?
First, you’ll need to check your eligibility. You can find the complete list of eligibility conditions on the HDB website. If you are unsure, you can also check your eligibility at HDB | Eligibility Check to determine whether you meet the conditions.
Once done, you can apply for an HLE letter. All you have to do is upload your documents at www.hdb.gov.sg/hleapply. You will then be given an HDB HLE number.
Note: Provide the correct information and complete documents. If there is an error in the information provided or the documents are incomplete, your HLE application will not be processed.
What Do I Need The HLE Letter For?
As previously stated, an HLE letter is required for those who wish to apply for an HDB concessionary housing loan. You will also need an HLE Letter for the following:
1. Purchasing a New BTO Flat
You’ll need an HLE letter before your first appointment. An HLE letter allows you to apply for an HDB concessionary loan and reserve an HDB flat. If your application for an HLE Letter is rejected, you cannot apply for an HDB concessionary loan.
2. Resale Buyers
You will also need to apply for and obtain an HLE letter when you’re buying a resale flat. The reseller doesn’t have to get one. One of the reasons for applying is for the HDB to assess the reseller’s property and approve the proposed resale amount.
As previously mentioned, HDB monitors every HDB property sale. In doing so, they can adjust the LTV limit, so the properties are affordable for the average Singaporean worker. Additionally, the House Development Board must grant the sale’s legalization. If the reseller fails to inform the HDB, they will receive penalties and be banned from owning an HDB flat.
3. Property Transfer
For example, your parents want to transfer the ownership of their HDB property to you. You will still need an HLE letter. Why? To inform the HDB of the activity and to prevent property value inflation. Additionally, it allows HDB to assess whether the individual taking over the property fits the eligibility requirements.
How Much HDB Loan Can I Take?
The maximum HDB loan amount you can borrow will depend on several factors, such as:
- Your credit assessment
- LTV limit
- Remaining lease of the HDB flat
- And other HDB policies
For instance, those who purchase a flat with a remaining lease that can cover the youngest buyer up to the age of 95 may borrow up to 90% of the flat’s purchase price or value (LTV).
However, for those purchasing a flat with a remaining lease that cannot cover the youngest buyer up to the age of 95, the maximum HDB housing loan amount they may borrow will be pro-rated from the 90% LTV.
Note: Loan To Value Limit (LTV) is the maximum loan amount you can borrow for a property. It is expressed as a percentage of the total property value.
HLE Letter Validity
The HDB Loan Eligibility (HLE) letter is valid for six months from the date of issue. There’s no need for re-assessment during this period. However, make sure that there are no changes in your financial position or family nucleus.
Once the HLE validity expires, you’ll need to apply for a new HLE Letter. You may apply for a new one a week before your current HLE letter expires.
There are certain cases wherein the HDB asks why there was a delay in your loan application using the letter. Repeatedly delaying your HDB housing loan application using the HLE letter may cause suspicion, leading to rejection when you apply for a new letter.
What Happens When My HLE Validity Expires?
In the event that your HLE Letter expires or is near expiry but still unable to find your desired home or failed to book an appointment, you may reapply for a new one, ideally a week before the expiry date, and if you still need a valid HLE Letter. This can be done by calling up and secure an appointment with HDB Officers of the estate.
Review of HLE
During your housing loan application, the HDB may review your letter. Here are some of the reasons why:
- If there is any incorrect information in the borrower’s data. Or if HDB has reason to question the data provided.
- There are changes in your household income and other events that may affect your eligibility for HDB loans.
- There is a change in your family nucleus.
- There are changes in HDB policies that will make you ineligible to buy a flat and/or apply for an HDB housing loan.
Eligibility and Requirements
| Criteria | Conditions |
| Citizenship | At least 1 buyer is a Singapore citizen |
| Household Status | – Have not previously taken 2 or more housing loans from HDB – Have taken 1 housing loan from HDB, and the last owned property is not private residential property (local or overseas) such as:
|
| Income Ceiling | – Average gross monthly household income does not exceed: $14,000* for families $21,000* for extended families $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 – If an applicant or occupier is unemployed for less than 3 months, his/ her average income will be computed based on the actual number of months he/ she has worked. |
| Citizenship | At least one buyer is a Singapore citizen |
| Ownership/ Interest in Property | – Have not previously taken two or more housing loans from HDB |
| Income Ceiling | Does not exceed household income ceilings – S$14,000 for families – S$21,000 for extended families – S$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 Singaporean Citizen (SSC) Scheme |
| Ownership/Interest in Property | – Must not own or have disposed of any private residential property in the 30 months before the date of application for an HDB Loan Eligibility (HLE) letter. – Do not own more than one market/hawker stall or commercial/industrial property |
What Documents Do You Need To Apply For The HLE Letter?
To obtain an HLE letter, you need to provide the following set of income and supporting documents. You can submit them here.
Here’s a list of supporting documents you’ll need. Check out the HDB website if you want the complete income guidelines.
Employee with CPF contributions
- Three months’ payslips
- Latest 15 months’ CPF contribution history
Employee without CPF contributions
- 6+ months’ payslips
- Credit Bureau Report
- Latest 6+ months’ bank statements/passbook
Self-employed
- Latest Notice of Assessment from IRAS or Certified Annual Statement of Accounts from an auditing firm
- Credit Bureau Report
- Latest 6+ months’ bank statements/passbook
Commission-based or part-time worker
- 6+ months’ commission statements or payslips
- Latest 15 months’ CPF contribution history
- Credit Bureau Report
- Latest 6+ months’ bank statements/passbook
Odd job worker
- Latest Notice of Assessment from IRAS or a recent letter from the employer certifying job designation, commencement date, and commission/salaries for 6+ months
- Latest 15 months’ CPF contribution history
- Credit Bureau Report
- Latest 6+ months’ bank statements/passbook
Unemployed
- Income proof for the preceding month(s) from the previous employer stating your gross monthly income and last day of service
- Latest 15 months’ CPF contribution history
How Long Should I Wait For The HLE Letter?
The HDB will process your HLE letter application within 14 days of receiving the complete documents. That said, make sure to provide the correct information and submit all documents to avoid delays or getting rejected.
To check the status of your application, you may log into My HDBPage. Go to My Flat > Application Status > HLE.
Conclusion
Key Takeaways:
- An HLE Letter is required when applying for an HDB flat – whether you’re buying a resale or new flat.
- Apply and obtain an HLE letter before signing an Option to Purchase. This letter is proof that the HDB has given you approval for a housing loan and that you fit the eligibility requirements.
- The HLE is a list of criteria set by the Housing Development Board (HDB) to properly assess each candidate applying for an HDB loan.
The Housing Development Board’s subsidized public housing makes it possible for ordinary Singapore workers to purchase the home of their dreams. However, to apply for an HDB loan, you’ll need to apply and obtain an HLE Letter. Click here to read more on HLE Letter and how to apply for it.
But if for some reason you still need extra cash, say for a downpayment, you may consider the services of a financial institutions. Use a loan comparison tool, such as Instant Loan, to find the best loan tenure, lowest interest rates, and most suitable terms and conditions. Instant Loan will help you make a smart financial decision.
FAQs
What does HLE HDB stand for? ›
HDB Loan Eligibility (HLE) letter.
What if my HDB loan is not enough? ›If the temporary loan amount (capped at the net proceeds from the sale of your existing flat) is not enough to complete your flat purchase, you must top-up the shortfall in cash within the time period HDB provides so that you can collect the keys to the booked flat.
What is the HLE based on? ›An HLE letter is basically a confirmation from HDB telling you that you qualify for an HDB concessionary housing loan, based on the information you submitted. It's similar to getting an In-Principle loan Approval (IPA) from a bank.
What is the loan to value limit for HDB? ›HDB Housing LTV (up to 80%)
This means you can loan up to 80% of the purchase price/property value. The downpayment can be paid by cash, from available savings in your CPF OA, or a mix of both. There is no minimum cash component.
| BTO HDB flat type | Income ceiling |
|---|---|
| 4-room flat or bigger | $14,000; or $21,000 if purchasing with extended or multi-generation family |
| 3-room flat | $7,000 or $14,000 depending on the project |
| 2-room Flexi flat | $7,000 for 99-year leases; or $14,000 for short leases (15 to 45 years) |
Minimum Loan Amount- There is no such mandated minimum loan amount for HDB loans. For bank loans, it is typically $100,000. Penalties – HDB loans do not have a lock in period therefore, there are no penalties applicable apart from a late payment on a HDB loan.
How can I clear my HDB loan faster? ›Early repayment of your HDB loan
To reduce your financial commitments, you can also use your CPF Ordinary Account savings to make partial capital repayment or redeem your outstanding housing loan before you reach 55.
If you have been paying off your loan for a while, and your home has also gone up in price, then your LTV will be lower than it was when you first took out your mortgage. This means that better deals may now be available, with lower interest rates.
How much salary do you need to buy a 500k house? ›To finance a 500k mortgage, you'll need to earn roughly $150,000 – $155,000 each year. We calculated the amount of money you'll need for a 500k mortgage based on 20% down payment and a monthly payment of 25% of your monthly income.
What is the format of HLE? ›The HL Essay (HLE) is a 1200-1500 word essay about a text studied in the IB English course. For Lang Lit, the work you choose to analyze can be literary or non-literary, but for IB English Literature the text must be literary.
What is HDB loan in Singapore? ›
An HDB loan requires you to make a downpayment of at least 10% of the purchase price, which you can pay in full using your CPF Ordinary Account (OA) savings, with cash or a combination of both cash and OA savings.
Why Singapore set up HDB? ›The Housing & Development Board was thus set up on 1 February 1960, tasked to solve Singapore's housing crisis. HDB sprang into action, and in less than 3 years, it had built 21,000 flats; 2 years later, that number was 54,000.
What is 85% loan to value limit? ›As a rule of thumb, a good loan-to-value ratio should be no greater than 80%. Anything above 80% is considered to be a high LTV, which means that borrowers may face higher borrowing costs, require private mortgage insurance, or be denied a loan. LTVs above 95% are often considered unacceptable.
What is the maximum age for home loan Singapore? ›Up to 35 years or 75 years of age, whichever is earlier. For example, if you are 25 years old now and buying a freehold property, the maximum loan period is 35 years. The loan duration plus the age of the applicant must be less than or equal to 75 years.
What is an acceptable loan to value? ›Generally, a good LTV to aim for is around 80% or lower. Managing to maintain these numbers can not only help improve the odds that you'll be extended a preferred loan option that comes with better rates attached.
How much house can I afford if I make $70,000 a year? ›If you're an aspiring homeowner, you may be asking yourself, “I make $70,000 a year: how much house can I afford?” If you make $70K a year, you can likely afford a home between $290,000 and $360,000*. That's a monthly house payment between $2,000 and $2,500 a month, depending on your personal finances.
What is the 335 rule in Singapore? ›Monthly Mortgage Servicing Of The Property Should Not Exceed 1/3 Of Your Monthly Salary. Second condition, buyers should not use more than one-third of their monthly income to service their monthly mortgage payments.
Can you buy house with $30,000 income? ›These are important questions to ask yourself. While it's hugely situational, it is definitely possible to purchase a home if you're making $30,000 a year. As long as you have enough savings to make a down payment, have a good credit score, and have a decent debt-to-income ratio, you should be good to go!
What is the average HDB flat size? ›How big is an HDB flat? It depends on the flat type. 3-room flats have a floor space of around 60 to 68 sqm, while the size of 4-room flats is around 85 to 93 sqm. 5-room flats have a bigger floor area of around 107 to 113 sqm.
Can I mortgage my fully paid HDB flat? ›Yes, refinancing HDB housing loan can be done. However, since banks have an LTV of up to 75%, depending on how much of your flat you've paid off, you may or may not need to top-up in cash/CPF.
What is standard HDB size? ›
HDB 4-room sizes are slightly larger than 3-room HDBs, measuring around 90 to 110 square meters. They typically come with three bedrooms, a large living room, a kitchen, and a bathroom.
What is the longest HDB loan tenure? ›Maximum Loan Tenure
The maximum tenure for a HDB loan is 25 years. Conversely instead of 25 years, you can take up to a maximum tenure of 30 years for a bank loan.
Who is it for? CPF members who purchase an HDB flat and take an HDB loan can choose to retain up to $20,000 in their Ordinary Account (OA), with the remainder going towards their housing loan payment. Buyers taking a bank loan can choose to retain any amount of their OA savings.
Can I switch to bank loan after HDB loan? ›With that said, if after a few years, you want a home loan refinancing option with lower interest rates, it is possible to switch from an HDB loan to a bank loan for more savings.
What does 80% loan-to-value mean? ›What is loan-to-value ratio? The loan-to-value ratio is the amount of the mortgage compared with the value of the property. It is expressed as a percentage. If you get an $80,000 mortgage to buy a $100,000 home, then the loan-to-value is 80%, because you got a loan for 80% of the home's value.
What is 90% loan-to-value? ›Your “loan to value ratio” (LTV) compares the size of your mortgage loan to the value of the home. For example: If your home is worth $200,000, and you have a mortgage for $180,000, your LTV ratio is 90% — because the loan makes up 90% of the total price.
How can I increase my loan-to-value? ›Make A Larger Down Payment
Larger down payments also increase the equity in your home. For example, if you make a $20,000 down payment on a home appraised for $100,000, your LTV on an $80,000 loan will be 80%. The larger the down payment, the smaller your LTV ratio – which is better.
Assuming a 30-year fixed conventional mortgage and a 20 percent down payment of $80,000, with a high 6.88 percent interest rate, borrowers must earn a minimum of $105,864 each year to afford a home priced at $400,000.
Can I afford a 500k house on 200k salary? ›A mortgage on 200k salary, using the 2.5 rule, means you could afford $500,000 ($200,00 x 2.5). With a 4.5 percent interest rate and a 30-year term, your monthly payment would be $2533 and you'd pay $912,034 over the life of the mortgage due to interest.
How much do you have to make a year to afford a $650000 house? ›Based on the current average for a down payment, and the current U.S. average interest rate on a 30-year fixed mortgage you would need to be earning $126,479 per year before taxes to be able to afford a $650,000 home.
How much loan can I get Singapore housing? ›
With MSR, you cannot exceed more than 30% of your household income and is only applied to HDB flats and executive condos. If you are looking to calculate your MSR, head over to use our easy to use mortgage servicing ratio calculator. However with TDSR, the loan limit is capped at 60%of your gross monthly income.
What is HDB rate in Singapore? ›When you take a housing loan from HDB, you will enjoy a concessionary interest rate. This concessionary 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, in line with CPF interest rate revisions. 2.60% p.a. 2.60% p.a.
Is HDB worth it? ›Thus, HDB resale flats are a good option if you don't want to waste time waiting or renting. However, with prices at a record high, do consider if the price you're paying is worth it based on the remaining years left on the lease.
Can foreigners own HDB in Singapore? ›Foreigners may not purchase HDB flats, but they can buy Executive Condominiums (ECs) that are at least 10 years old. Can foreigner buy private condo in Singapore? Under the Residential Property Act (Chapter 274) of the Singapore Law, foreigners are eligible to buy a condominium in Singapore.
What is the most common HDB type in Singapore? ›If you are purchasing a Build-to-Order (BTO) flat from HDB, you can choose from 2-room Flexi, 3-, 4-, 5-room, to 3Gen flats. One of the most common HDB BTO flat types is the 4-room flat, which offers a comfortable living space for young couples and families. With 3 bedrooms, there is adequate space for rest and play.
Is HDB better than condo? ›Affordability: HDB flats are more affordable, and offer a better value for money. Community: HDB flats offer a sense of community and a strong social network, which can be lacking in a condo.
What is 60% maximum loan-to-value? ›What is 60% LTV? LTV means loan-to-value – it's the size of your mortgage as a percent of the total property value. In other words, how much of the value of the property that you're borrowing. A 60% LTV mortgage is 60% loan, 40% deposit or equity.
What is the maximum loan amount? ›A maximum loan amount describes the total sum that one is authorized to borrow on a line of credit, credit card, personal loan, or mortgage. In determining an applicant's maximum loan amount, lenders consider debt-to-income ratio, credit score, credit history, and financial profile.
What does 60% loan-to-value mean? ›A 60% loan to value (LTV) mortgage is available when you have a deposit of at least 40% of the value of the property you're buying or remortgaging. This means you'll be borrowing the remaining 60% of the property value from the lender.
Can a 50 year old get a 30 year mortgage? ›Age doesn't matter. Counterintuitive as it may sound, your loan application for a mortgage to be repaid over 30 years looks the same to lenders whether you are 90 years old or 40.
Can a 65 year old get a mortgage in Singapore? ›
Standard mortgage products may become more difficult to obtain as you get older. The standard current rules that are valid for Singapore housing loans are: Age Limit for Salaried Individuals: 21 to 65 years. Maximum loan tenure can stretch to 35 years (applicable on refinancing too)
Can a retired person get a home loan Singapore? ›For example, when it comes to home loans, you can only borrow up to 60 per cent of the property value, if your age plus the loan tenure would exceed 65. But if you shorten the loan tenure, such that your (age + loan tenure) is less than 65, you could borrow up to 80 per cent of property value instead.
Is 40% a good LTV? ›LTVs at 60% or below are considered the best in terms of getting the best mortgage deals. Ideally, lenders like to see LTVs at 80% or below. However, it is possible to sometimes find mortgage deals if your LTV is above 90%.
What is a 65% loan-to-value? ›If you have a mortgage with an outstanding balance of $65,000, that means that your current LTV is 65%. If your credit is good and you qualify for additional financing, you may be able to borrow up to an additional $25,000 through a HELOC, bringing your total LTV up to 90%.
What is the formula for loan-to-value? ›LTV represents the proportion of an asset that is being debt-financed. It's calculated as (Loan Amount / Asset Value) * 100.
What does HDB mean in construction? ›HD/HDB Bolted Holdown - Tropical Construction Supply.
What does HDB stand for construction? ›This Guide is prepared by the Housing and Development Board (HDB) and the Building and Construction Authority (BCA) to help consultants and contractors use Building Information Modelling (BIM) in the design and construction of new public housing developments.
What is the HDB loan? ›An HDB loan requires you to make a downpayment of at least 10% of the purchase price, which you can pay in full using your CPF Ordinary Account (OA) savings, with cash or a combination of both cash and OA savings.
What does BTO HDB stand for? ›Build-To-Order (BTO)
What is HDB 5 year rule? ›HDB MOP is a rule that restricts you from selling or renting out the entire flat during the first five years of moving in. During the MOP, you are also not allowed to buy another private property.
What is the most common HDB type? ›
If you are purchasing a Build-to-Order (BTO) flat from HDB, you can choose from 2-room Flexi, 3-, 4-, 5-room, to 3Gen flats. One of the most common HDB BTO flat types is the 4-room flat, which offers a comfortable living space for young couples and families. With 3 bedrooms, there is adequate space for rest and play.
What does HDB mean in Singapore? ›The Housing & Development Board (HDB) is Singapore's public housing authority. We plan and develop Singapore's housing estates; building homes and transforming towns to create a quality living environment for all.
How long does it take for HDB to be built? ›Float: 6 months. The HDB caters a buffer of six months for unforeseen circumstances such as inclement weather, minor supply issues and soil factors. Total duration taken to construct the Kempas Residences BTO project: 56 months, or four years and eight months.
Who builds HDB Singapore? ›The Housing & Development Board was thus set up on 1 February 1960, tasked to solve Singapore's housing crisis. HDB sprang into action, and in less than 3 years, it had built 21,000 flats; 2 years later, that number was 54,000.
How many HDB are there in Singapore? ›In 2022, there were around 1.1 million Housing Development Board (HDB) apartment units in Singapore, compared to approximately 857 thousand in 2001. The HDB is a statutory board in Singapore that is in charge of public housing.
How do I check my HDB loan status? ›You can view the status of your loan application by logging into our website www.hdbfs.com and click on My Account. Enter the registered mobile number, DOB or PAN number, CAPCHA & hit on send OTP, post verifying the OTP the details can be viewed.
Which bank is HDB? ›Parent Company. HDB Financial Services Limited is a subsidiary company of HDFC Bank.
What is the difference between BTO and HDB in Singapore? ›A Build-to-Order (BTO) flat is a newly-built HDB flat launched prior to its construction. These houses have a fresh lease of 99 years. This public housing scheme was introduced in 2001 to offer potential homebuyers more flexibility in choosing the location of their new homes.
What is the difference between BTO and HDB? ›Build to order (BTO) is a real estate development scheme enacted by the Housing and Development Board (HDB), a statutory board responsible for Singapore's public housing.
Can I buy BTO if I own a HDB? ›1) Yes, resale HDB flat owners are eligible to buy BTO flats. As long as you meet the eligibility criteria spelled out by HDB. 2) You shall be subject to a resale levy if you had received grants in your resale flat purchase.