Everything You Need To Know About Applying For A HDB Loan

Next step: Apply for HDB Loan Eligibility Letter (HLE)


The next question facing you is probably: so… how much loan can I get? You can find out by applying for an HDB Home Loan Eligibility (HLE) letter, which specifies the maximum loan amount from HDB you can stand to receive. The HLE letter should be obtained before your first appointment (for BTO buyers) or before you sign the Option to Purchase and pay the option fee as deposit (for resale flat buyers).

The maximum amount that HDB will be granting you depends on three main factors:

  • Your age
  • Your income
  • Your financial standing

It’s logical to see how your age and income both influence your maximum loan amount. Given the unit to buy and the borrower’s financial standing (i.e. outstanding debt) is the same, HDB would extend a higher loan amount to the younger applicant simply because he has more years to pay off the loan before his/her retirement age, which is the cut-off age for any HDB loan.

As for your financial standing, this is a little bit more complicated. To begin, here are the things that do NOT influence your financial standing, and DO NOT AFFECT the amount of money HDB would be willing to lend you:

  • Rental income
  • Interest from fixed deposit/ savings account
  • Alimony allowance (divorce cases)
  • Bonuses
  • Dividend income
  • Director fees
  • Overtime income
  • National Service allowance
  • Claims/ reimbursement/ expenses
  • Overseas allowance for scholarships

Here’s how HDB takes income into consideration before specifying a maximum loan amount on your HLE letter. For a regular employee, the two most important documents that you are required to show HDB is a payslip—latest 3 months—from your employer and last 15 months’ worth of CPF contributions.

For self-employed, part-time and odd job workers, documents such as your annual tax assessment form (IR8A) needs to be furnished to HDB. They might also have to make a Statutory Declaration to state what they’ve declared is honest and true.

Required documents for HLE letter

HDB requires different documents for different people. In a nutshell, the less stable your income, the more proof HDB wants before they would grant you a loan.

For an employee with CPF contributions

  • Latest three months’ payslips
  • 15 month CPF history

For an employee without CPF contributions

  • Latest 12 months’ payslips
  • Latest 12 months’ bank statements
  • Credit Bureau report

For Self-employed person

  • A valid Accounting and Corporate Regulatory Authority (ACRA) Business Profile computer or a valid licence of business/trade
  • Latest notice of assessment from the IRAS or a Certified Annual Statement of Accounts from an audit firm

For Commission-based and part-time workers

  • Commission statements and payslips for the last 12 months
  • Latest 15 months’ CPF history
  • Credit Bureau report
  • Latest 12 months’ bank statements

For odd job workers

  • Latest Notice of Assessment from the IRAS or a recent letter from the employer certifying your job designation, commencement date, and your commission/salaries for the last 12 months
  • Latest 15 months’ CPF history
  • Credit Bureau report
  • Latest 12 months’ bank statements

For pensioner

  • Latest 3 months’ payslips, or a recent letter from the previous employer stating the monthly pension received for the last 3 months
  • Credit Bureau report
  • Latest 12 months’ bank statements

For unemployed person

If you’ve been unemployed for less than 3 months then you should show income proof for the preceding months from the previous employer the gross monthly income and the last day of service plus you have to show the last 15 months’ worth of CPF history

If you have been unemployed for longer than 3 months you have to submit a Statutory Declaration, which you can request at the HDB Hub loan counter or any HDB branch

An HLE letter takes about 3 weeks to obtain. In the event that you do not get the amount you were hoping for, you can basically reverse engineer the process.

To do so, start by looking at what factored into HDB’s decision and improve on these factors. If you are a commission-based worker, for instance, there is ample scope for increasing your loan quantum (i.e. if your commission income decreased sometime in the last 12 months you can try to take on more work, get a higher average monthly pay for 12 consecutive months and apply again. Or you might have outstanding debt that would raise your maximum loan amount if you repay them fully before reapplying.

To give you a useful idea of the maximum loan amount you’d get before you start your home search, HDB has a useful calculator to estimate how much loan your HLE letter will grant you.

Note: If you are buying a Build-To-Order (BTO) flat from HDB, then your financial position will be reviewed twice; once before you decide to purchase the flat, and another time nearer to the completion date of the flat. Make sure your financial ability to service the housing loan has not changed by this point. While quite rare, it is possible that after you have gone through the BTO process, and put down your down payment, you are unable to get an HDB loan. To avoid this disappointment so close to the finish line, we advise you to remain fiscally prudent and prioritise financial stability.

Credit Bureau Report

As noted above, getting a HDB Concessionary Loan also requires a credit report from certain buyers. While most people are not aware of this, the Singapore Credit Bureau (SCB) pools all your credit information from different banks and companies, giving you a personalised score! You can request your credit score here on www.creditbureau.com.sg. If you do not have an AA score (the highest), you have room to improve it and by that positively influence the maximum loan amount you may get.

Click page 3 to find out how to apply for a loan.

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