News

Revised Housing Loan Limit and Downpayment for Purchase of HDB flats 
Posted on Tuesday, July 19, 2005 - 12:00 AM

As announced by the Minister (ND) in Parliament on 19 July 2005, HDB will revise upwards the housing loan limit for HDB concessionary loans with immediate effect, in tandem with the upward adjustment of mortgage financing limit by banks and financial institutions.

Revisions to Housing Loans Guidelines

2. The Government has announced the following revisions to the housing loans guidelines for banks and financial institutions:

(a) Financing limit: Loan-To-Value Limit to increase from 80% to 90% of Value1 of Property.

(b) Cash Requirement: Lowered from 10% to 5% of Value.

Housing Loans From HDB for Purchase of HDB Flats

3. In line with these revisions, HDB will also revise its guidelines for granting HDB housing loan as follows:

(a) Downpayment for Purchase of Flats
The downpayment will be reduced from 20% to 10% of the Value. The 10% downpayment is fully payable with CPF monies as per existing policy.

(b) Housing Loan Ceiling
The housing loan ceiling will be raised from 80% to 90% of the Value, subject to credit assessment and full utilisation of CPF monies before loan disbursement.

Housing Loans From Banks for Purchase of HDB Flats

4. As announced, under the revised housing loans guidelines, HDB flat buyers will pay a lower 10% downpayment and can obtain a mortgage loan up to the 90% financing limit from banks and financial institutions.

5. The original plan was for the 10% cash downpayment for HDB flats financed with bank loans to be phased in over a period of 5 years, with a 2% increase each year starting from 1 Jan 2004. Currently, the cash portion of the downpayment is 4%. Under the revised guidelines, buyers of HDB flats who are taking bank loans will eventually have to pay 5% downpayment in cash. The last 1% increase will take effect from 1 Jan 2006.

Staggered Downpayment Scheme

6. Currently, young couples who book a flat from HDB that is under construction can qualify for HDB?s Staggered Downpayment Scheme. Under the Scheme, they can pay the downpayment in two instalments ? the first 10% upon signing the Agreement for Lease for the flat, and the remaining 10% upon taking possession of the flat. With the downpayment for HDB flats now reduced to 10%, young couples will only need to pay a 5% downpayment when signing the Agreement for Lease, and the remaining 5% upon taking possession of the flat.

Implementation

7. These revised policies will take effect from 19 Jul 2005. The cut-off date for purchase of new and resale HDB flats, and transfer of ownership of existing flats will be based on the following:

Mode	Cut-off Dates
Purchase of New Flats	Date of booking flat
Purchase of Resale Flats	Date of resale application received by HDB
Transfer of Ownership of Flats	Date of transfer application received by HDB

8. For enquiries, the public can contact HDB through the following channels:
(a) Resale/Sales Enquiry Line : 1800 8663 066
(b) SERS Enquiry Line : 1800 8663 070
(c) HDB Branch Offices : 1800 2255 432

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¹ Value in this Press Release refers to the Purchase Price or Valuation of Property whichever is lower.

Issued By : Housing & Development Board
Date : 19 Jul 2005