Complete Guide to HDB Flat Eligibility (HFE) Letter
This article discusses when, why, and how to apply for HDB Flat Eligibility (HFE) Letter that includes two steps, first complete a preliminary HFE check, and afterwards submit an application for an HFE letter.
Are you getting ready to purchase an HDB flat? If so, you will have to get an HDB Flat Eligibility (HFE) letter ahead of time, whether you’re looking for a resale or BTO flat. Your HFE letter will provide you with an overall understanding of the process as well as the housing and financing options available to you.
The HDB Loan Eligibility (HLE) has now been replaced by the HFE letter. Previously, the eligibility of prospective homebuyers to buy an HDB flat, get grants, and take out a housing loan was evaluated at various stages of the buying process. But now the process has been streamlined, so that there is only one application, making it all the more convenient. This letter informs prospective flat buyers ahead of time what their eligibility is for buying a resale or new flat, getting an HDB home loan, and CPF housing grants, including the loan and grant amounts.
Prior to the implementation of the new HFE process on 9th May 2023, people applying to buy a resale or new flat, would not have their eligibility to buy the flat or housing grants confirmed. This led to a great deal of uncertainty and anxiety among buyers.
HDB has streamlined the flat buying process with this newly introduced HFE letter. The various eligibility assessments for purchasing an HDB flat, HDB housing loans, and housing grants have been consolidated into just one online application via the HDB Flat Portal. The result will be more convenience and certainty for flat buyers, giving them more clarity ahead of time on what their housing budget is as well as their financing options. With this information flat buyers can make more sensible decisions regarding their purchase.
If you are thinking about taking out a loan from a bank or other financial institution (FI), you can also apply to participating FIs for an In-Principle Approval at the same time you are applying for an HFE letter. Your letter will also indicate a loan assessment.
Table of Contents
Why do I need to have an HFE letter?
How to Apply for an HFE Letter
Step 1: Complete a Preliminary HFE Check
Provide details regarding your household and income:
Submit the appropriate declarations:
State your intent for a housing loan:
Review the details and receive your preliminary HFE assessment:
Step 2: Apply online for an HFE letter
Provide additional information:
Upload the required documents:
How You Will Receive Your HFE Letter
Guided Process for BTO Flat Buyers
Why do I need to have an HFE letter?
You will need a valid HFE letter when you:
- apply to buy an HDB flat during a sales launch or an open booking of flats, or
- get an Option to Purchase (OTP) from an HDB resale seller, and when you apply to HDB to resell your flat.
The HFE letter provides you with the information you need to make the right decision without having to guess as you plan the budget for your purchase. It’s important to plan ahead by applying for your HFE letter well in advance, which you can easily do because your HFE letter will be valid for a period of six months.
What should I do with my Intent to Buy (ITB) and HDB Loan Eligibility (HLE) letter that I already have?
If you have already obtained a valid Intent to Buy (ITB) for the purpose of purchasing a resale flat and already have a valid HLE letter to get an HDB housing loan you can still submit your resale application as long as both your ITB and HLE letter are still valid. In this case there is no need for you to apply for an HFE letter as it would not be relevant. However, if your ITB and/or HLE letter is expired, you need a valid HFE letter prior to being granted an Option to Purchase (OTP) from a flat seller.
How to Apply for an HFE Letter
Follow these two steps in applying for an HFE letter:
|
Step 1. Complete a preliminary HFE check.
|
Continue reading for further details on each step of the HFE process.
Step 1: Complete a Preliminary HFE Check
Provide details regarding your household and income:
Use your SingPass to log into the HDB Flat Portal. To save time you can use Myinfo to retrieve your details, which include your household income and any private properties you own. You should also update your particulars if anything has changed. You will also declare that all the information provided is true. You will also be required to provide the details on the application of any co-applicants and occupiers.
NOTE: If you need additional time, you are permitted at any time to save a draft copy while filling out the application. This draft will be available to you for 30 days from the start date of your preliminary HFE check.
Next, you will need to state the employment details for everyone listed in your application. This includes their monthly income as well as bonuses. While implementing the HFE letter, HDB has also standardised to 12 months the income assessment period (when income months are known), rather than three or six months before this HFE. This allows for more consistency in the assessments among applicants whose jobs are of a different nature and/or remuneration structure. It also gives a clearer picture of an applicant’s level of income, especially among those with a fluctuating income that may not be the same each month.
Submit the appropriate declarations:
This is where you declare the private property interest(s) of all persons listed in your application.
State your intent for a housing loan:
State whether you plan on taking out a housing loan to purchase your flat. If so, you must declare the monthly financial obligations you already have, like instalment payments, insurance premiums, credit card bills, and other loan repayments.
Review the details and receive your preliminary HFE assessment:
Lastly, it’s time to review all the details you’ve provided. If anything has changed, like your income, employment, or private property you own, you must start the preliminary HFE check all over again. So, make sure that all the information you’ve provided is accurate and up to date.
Once you’ve submitted the information you will instantly receive a preliminary result, giving you a quick answer to whether your household is eligible to buy a flat, get CPF housing grants, and to take out an HDB housing loan. And if it turns out that you are eligible for an HDB loan, you have the option of comparing various loan scenarios, whether it is monthly instalment plans and interest due, based on the loan amounts and repayment periods.
If you are eligible to take out an HDB housing loan, it would be smart to compare the various loan scenarios regarding monthly instalment payments and interest rates, based on possible loan amounts along with repayment times.
If you decide to move forward with the purchase of an HDB flat, then proceed to Step 2 and apply for your HFE letter. You have 30 calendar days from when you started Step 1 (your preliminary HFE check) to complete your application.
Step 2: Apply online for an HFE letter
Choose your loan options:
Begin by using your SingPass to log into the HDB Flat Portal. The option you chose in your preliminary HFE check will pop up. If you have since changed your mind you can choose a different option now.
If you want to take out a loan to finance the purchase of your flat, you can:
- Look at your eligibility details for an HDB loan and the various loan scenarios.
- Learn more about the obligations of taking out a housing loan from the various financial institutions (FIs).
Just like the preliminary HFE check, if more time is needed you are allowed to save a draft that will remain available for 30 calendar days from when you started your preliminary HFE check.
Under this system, you can compare housing loan packages not only from HDB but also from participating FIs and ask for an In-Principle Approval (IPA) for a loan from those FIs. Your IPA will indicate the FI’s loan assessment. Prior to the new system that went into effect on 9th May 2023, buyers who wanted to take out a home loan from the FIs to finance the purchase of an HDB flat, would have had to apply to each FI for an IPA as well as a Letter of Offer (LO). Now that the loan application process is enhanced within the HDB Flat Portal, buyers can take it a step further by requesting an IPA and LO from participating FIs. At the same time buyers are applying for an HFE letter, they can ask for an IPA from participating FIs to learn their eligibility for a home loan.
Once they secure a flat, buyers can also ask for an LO from the FI they selected via the HDB Flat Portal. x
NOTE: If possible, apply for your HFE letter during the same calendar month in which you began your preliminary HFE check. If not, you would be required to update the employment details for everyone listed on your application.
The HDB Flat Portal has prompts to guide you through both Steps 1 and 2. You must be prepared to enter all required information, such as your SingPass login information, and details on all the applicants and/or occupiers to ensure a smooth process.
Provide additional information:
Next, enter your information. To move things along faster, use Myinfo to pull up the following:
- Your details and contact information
- Your history of contributions to CPF over the last 15 months
- The most recent Notice of Assessment received from IRAS
Review your information:
Before pressing the “submit” button on your application, make sure you review all the information, so that everything is correct and up to date. Look at your income, the details about the declared private property ownership of anyone in your household on your preliminary HFE check. If any of this information has changed, you need to do your preliminary HFE check all over again.
Next, review the financing option you’ve chosen as well as your lender(s) if you are taking out a home loan. If you want to make any changes, Applicant 1 is the only person allowed to do so, and this would entail going back to “Choose loan options.”
Lastly, read over the Terms and Conditions on the application to ensure that you understand everything.
Once you’ve reviewed everything for accuracy, digitally endorse all the information you provided. All applicants and occupiers (if any) are required to use their SingPass to log in and verify their information and declarations before the application can be submitted.
Upload the required documents:
After all the applicants and occupiers have finished endorsing the application, you will be informed of any supporting documents that you are required to provide.
Submit your application:
Once you have uploaded all the documents and finally submitted the application, an acknowledgment page will pop up. HDB will reach out to you if they require any additional information to process your application. You can check on the status of your application any time by logging into the HDB Flat Portal.
HDB typically sends applicants their HFE letter within 21 business days of receiving the complete application. However, it may take longer to process your application if it is received during a peak period, like in the months leading up to and during a sales launch.
If you submitted an application for an IPA from participating FIs, they would contact you directly regarding the result of your application. To confirm the FI’s loan offer, go to the HDB Flat Portal once you’ve secured your flat.
How You Will Receive Your HFE Letter
Once your HFE letter is finished, you will receive an SMS message to log into the HDB Flat Portal. The following is a sample of a typical HFE letter:
Your HFE letter will be valid for six months from the date it was issued. This letter will advise you of your eligibility to buy a new and/or resale HDB flat. It will also inform you of the amounts of an HDB housing loan and CPF housing grants you are eligible to receive. This HFE letter allows you to start looking at resale flats to buy or apply to HDB for a BTO flat.
Guided Process for BTO Flat Buyers
Currently, people buying a new flat access My HDBPage to look at the details of their flat application, including the dates of upcoming appointments with HDB. But going forward, buyers with an HFE letter who want to purchase a flat from HDB will keep on being guided through this process via the HDB Flat Portal. Buyers will get personalized information on their application to help them plan ahead and get everything ready at various stages of their flat buying process, like figuring out their payment plans ahead of time. Once their flat is ready for them, buyers can book an appointment slot via the same platform in order to collect the keys to their flat.
HDB Resale Portal to be Integrated with HDB Flat Portal:
The HDB Resale Portal and the HDB Flat Portal will be integrated together to make the process more convenient. Sellers and buyers of resale flats will be able to transact business via the HDB Flat Portal and receive step-by-step guidance throughout the process, allowing them to enjoy a seamless transaction.
At Pinnacle Estate Agency, we strongly believe in sharing our real estate knowledge to the public. For more content like this article, check out our Singapore Property Guides.
