Looking to buy a HDB flat? It’s not cheap and our monthly salary doesn’t make it easier. The good news is, there are options to get a home loan. Other than taking a loan from a bank, as a flat buyer you can apply for the HDB Concessionary Loan (or HDB loan, in short), a special type of mortgage issued by the government body. Here’s what you need to know.
Eligibility for HDB Loan
The key thing to note is that the HDB loan has an income ceiling of $12,000 ($18,000 for extended families). If the annual assessable income for both applicants (e.g. you and your partner) exceeds this amount, you’ll have to take a bank loan instead. After all, the intention of HDB in financing mortgages is to make home loans with stable terms available for those who might not be able to get a bank loan on favourable terms, if at all (i.e. flat buyers of lower income).
That said, while the HDB loan is seen as a godsend for some, HDB as a lender is also obliged to exercise fiscal prudence. In short, this means a lower income will get you a lower maximum loan amount, affecting which HDB flat you can afford. An odd-job or part-time income stream might also have to undergo what’s called a “haircut”, where only 70% of that income is considered for the loan application.
These are the eligibility criteria you’ll have to meet if you are looking for an HDB concessionary loan:
- You are a Singapore Citizen
- You are 21 years or older
- Your gross monthly household income is less than $12,000 ($18000 for extended families)
- You do not own, or have not owned any residential private property in the 30 months before the application for the HDB loan
- You do not own more than one market/hawker stall or commercial/industrial property
- If you do operate a market/hawker stall or commercial/industrial property, you have to work in it yourself
A more detailed version of the list above can be found here.
If you want to be sure, you can also fill out this 30 second questionnaire to see whether you are eligible for a HDB Concessionary Loan.
Click page 2 to read the next step.