“BTO already?” – if you’re in a long-term relationship, you’ve probably gotten this question countless times, whether it’s from kaypoh relatives or well-meaning friends.
I’ve heard my fair share of horror stories about couples trying countless times to get a decent queue number, from both friends and strangers alike. Ten applications down and still no luck? That’s basically $100 down the drain – ouch. Most of us thought the three- to four-year waiting period was long enough, but no thanks to Covid, this has now stretched to six to eight years!
And even with no marriage cert or children to accelerate our standing on the “priority list” and the extended wait in mind, my boyfriend and I decided to try our luck.
As a fresh grad in a fresh job, and my partner still in school, we thought our chances of getting a decent queue number were quite low, so we just hantam. Surprisingly enough, we cinched 83/272. If you’ve ever attempted to apply for a BTO, you’ll know that any number below the number of units available is considered great and the odds of snagging a home on a decently high floor are pretty good.
And so, we were thrust into the complex and daunting process of getting a BTO flat.
Things to consider before applying
While I might have applied for my flat on a whim and got lucky, I would not recommend others to follow in my footsteps. We got a good queue number at our ideal place on our first try – but it was exactly because of how hard good queue numbers come by that we felt compelled to go for it, even if we weren’t the most ready.
Questions like “will we be able to finance the flat?”, “will there be any drastic life changes in between these six years i.e. migration?” all came to mind. But after working out the math and some careful planning for the future, we decided to go for it – but it was not an easy decision because it involves uncertainty. For everyone thinking of applying, here are some things to consider:
This is the most straightforward one. Most of us would be eligible to apply, as long as your combined household income is below $14,000, and you do not own any other property. If you’ve hit the income ceiling, you’d have to go for EC and condominium or landed property instead.
2. Your relationship
After all, there are so many couples who have broken up before collecting their keys, forfeiting that downpayment of a few tens of thousands of dollars. I’m sure none of them saw that coming – nobody can expect what’ll happen in three years, much less six.
The process of getting a house together is in itself a difficult territory to navigate, as you might not see eye to eye on many things – whether it’s where to stay, what’s your budget, or which unit to pick. This could very well be the breaking point of your relationship, if you realise that you have irreconcilable ideas of how the future might look.
After three years of being with my partner, BTO-ing together was a sharp reality check as it was as good as deciding if you want to spend the rest of your life with him/her. Even though we both went into the relationship with the future in mind and have been talking about it, I still spent a long time contemplating this.
3. The wait
If you’re confident your relationship will withstand the roughest elements, the next question to ask is whether you’re both okay with waiting more than three years before getting your own nest. While most projects have stretched to six years or more, there are a few that will be completed sooner – such as the Tengah BTO launches that have an estimated 3-year wait.
If you can’t wait, consider going for resale or Sales of Balance Flats, which have significantly shorter waiting times. In fact, purchasing resale flats entitles you to more grants, such as the Proximity Housing Grant and Enhanced CPF Housing Grant.
The down payment is fully CPF deductible
Image credit: TheSmartLocal
If, against all odds, you’ve decided that BTO is the option for you, you’ll now have to see if you’re able to finance the initial down payment (10% of purchase price), which you’ll have to pay within four to six months of choosing your unit. This can range from $10,000 all the way up to $60,000 – depending on how much the unit you’ve chosen costs.
First-timers below 30 years old are eligible for the staggered down payment scheme, where you’ll only pay 5% of the purchase price first, and the other 5% upon key collection.
Since I have not worked full-time for more than 12 consecutive months, and my boyfriend is still in university, we opted for deferred income assessment. This means that our income will only be assessed for HDB or bank loan eligibility as well as grants closer to the key collection date in six years time.
I must say, deferring your income assessment added to the already daunting uncertainty – although it’s unlikely we’ll start raking in millions in years to come, there’s the possibility of exceeding the income eligibility for HDB loan, or worse being unable to finance it at all. Plus, you’ll get more grants when your income is low, so it would be likely that we don’t qualify for that anymore.
That said, having a house to look forward to made us way more diligent in saving and doing careful financial planning. Also, even for those who assess their income during booking of flat, there is still a reassessment six months before key collection to see if the couple or individual is eligible for more or less loans with their new income. Therefore, we decided to go ahead.
Citizenship: At least one Singapore citizen
Age: Above 21 for couples, above 35 for singles
Income ceiling: $7,000 or $14,000 for 3-room flat (depending on project) | $14,000 for 4-room flat and above
Stage 1: Research and application
Image credit: TheSmartLocal
After you’ve decided that you’re ready to go forth on the BTO journey, be careful not to just jump on any project and apply. Research thoroughly about each project so that you can make an informed decision. Every year, there are four BTO launches during each quarter – February, May, August and November. You can find out more about the upcoming launches on the HDB site.
Budgeting wise, BTO projects in non-mature estates like Woodlands, Choa Chu Kang and Tengah are much more affordable than BTO projects in mature estates like Geylang, Bishan and Kallang/Whampoa. For instance, the cost of a 3-room BTO flat in Choa Chu Kang excluding grants starts from $164,000, while a 3-room BTO flat in Geylang starts from $355,000.
After you’ve decided on a project, submit an application on the HDB site. If you’re applying as a couple, apply under the Fiance/Fiancee scheme – you don’t have to be engaged at this point of time. If you’re above 35 years old and applying as a single, apply under the Public scheme.
Stage 2: Getting (or not getting) a queue number
Image credit: HDB
While waiting for a queue number, you can go on the HDB site to see how many people applied for each project. Through this, you can see the probability of you getting a queue number. For the project we applied for, the probability of getting one was actually quite high, as it was relatively less oversubscribed – something we did not expect at all as we thought Bishan would be a very popular option. Plus, it’s been six years since a BTO project launched at Bishan.
We applied thinking it’d be impossible to get a number, much less a decent number. Our expectations were kept as low as possible, but when the results were out – our number was 83. Given that there are 470 units available, we’d likely get to choose a unit we want. Queue numbers can go all the way up to the thousands, and for those, you’d either have to bank on people dropping out, or settle for a less popular unit.
You can also forfeit your queue number – but with a small penalty. For instance, if you are unsuccessful at getting a queue number more than twice, additional ballot chances will be given to you for subsequent applications. However, if you were to forfeit a queue number, these additional ballot chances will be reset to zero.
Stage 3: Apply for HLE, AIP & Grants
Image credit: The Smart Local
If you got a queue number and you’ve decided you’re most likely going to book a flat, you’ll need to apply for a loan, either from HDB or from a bank. For the HDB loan, you’ll need to apply for a HDB Loan Eligibility – a letter that will certify whether you’re eligible for a HDB loan. To qualify for this, your combined income cannot exceed $14,000. If you’re getting a bank loan, you need to get an “Approval In Principle” (AIP) from your bank of choice directly.
Note that if you’re getting a bank loan, your down payment will be 25% of the loan amount instead of 10%. The documents required at this stage are mainly proof of income as well as CPF contribution history. Of course, if you’re able to pay the entire sum out of your CPF and savings, you won’t need a loan.
Image credit: TheSmartLocal
You will also be assessed for the Enhanced CPF Housing Grant (EHG), which is for those with a combined income of less than $9,000/month. The grant amount ranges from $5,000-$80,0000 – the less you earn, the more you’ll get. This is best for those who are planning to stay in their new homes for a longer period of time, as you’ll have to return these grants with interest upon selling it.
Alternatively, you can defer income assessment if you fulfill the following criteria:
- At least one applicant is a first-timer
- Neither of you have worked for 12 consecutive months
- Are full-time students or NS-men or completed studies or NS within the last 12 months prior to flat application
Stage 4: Selecting your unit
As a complete noob about choosing a HDB unit, I asked my dad for help. I expected us to be analysing the layout in print, but he drove us down for a site recce. For anyone who is deciding whether to get a BTO, a site recce is highly recommended. You’ll get a sense of the neighbourhood and see if you’d want to live there.
I was sold when I saw that it’s right next to a river, near a decent hawker center and the bus stops nearby had decent routes too.
Image credit: Aug’20 BTO group
There’s a lot to consider when selecting your unit – so much this can be expanded into an article on its own. But in general, avoid the west sun and monitor future URA developments in the area. If unblocked views are important to you, choose a unit on a floor higher than surrounding buildings – including those that haven’t been built yet. We knew that a new building was in construction nearby that’ll be 18 storeys high, so we went for a unit on the 26th storey for unblocked views.
Also download the project details and find out the price of each unit. For instance, the difference between a 15th storey unit and a 25th storey unit is about $22,000. Can you afford that or would you rather save it for renovation?
It’s very helpful to join the Telegram group for your project – there’s definitely gonna be one. Group members discuss what units they wanna choose and why, do polls to see the popularity of each block, and also share their own research and excel sheets – you’ll get to learn a lot from them! Plus, if you successfully book a flat, you’ll be getting to know your prospective neighbours in advance.
It’s a huge difference between being at the site itself, compared to looking at this tiny model minutes before booking your flat
In about two to three months, you’ll receive a message telling you the date to go down to HDB to choose your flat . Prepare all the documents using the checklist provided on the HDB site before you go down – there’ll be a ton of documents to sign.
You’ll also be asked to decide if you’d like to opt out of the HDB Optional Component Scheme (OCS). This scheme allows you to pay for minimal renovation using CPF, and it means that your home will be furnished with essentials like flooring, wall tiles, doors and sanitary fittings the moment you get your keys. However, you would have no say over the designs.
We chose to opt out of this, which is what most young couples do, as we’d prefer to work with a blank canvas and engage our own designer in future to get our ideal aesthetics. However, that also means we’d have to pay for renovation in future with cash, and that it would cost a few thousands extra.
Cost: $500 for 2-room flexi flats | $1,000 for 3-room flats | $2,000 for 4-room and larger flats
Stage 5: Signing the lease agreement & paying the down payment
Image credit: TheSmartLocal
After about four months of booking your flat, HDB will contact you again to come down to sign the lease agreement. At this point of time, you’ll have to pay the down payment, stamp duties and legal fees. Here’s a breakdown of what you’ll have to pay:
- Down payment: 10% of purchase price with cash and/or CPF (for HDB loan takers) | 25% of purchase price of which at least 5% must be in cash (for bank loan takers) | 5% of purchase price (for deferred income assessment)
- Stamp duty: 1% of first $180,000 + 2% of second $180,000 + 3% of $640,000 + 4% of remaining costs
- Legal fees: Conveyancing Fees ($0.90 per $1,000 of first $30,000 + $0.72 per $1000 of next $30,000 + $0.60 per $1,000 for remaining amount) + $64.25 Caveat Registration Fees
For us, we’ve actually yet to arrive at this stage, although it will be soon – so technically, we can still cancel it if something hits the fan.
Cost: 5%-25% of your unit (varies) + stamp duty + legal fees
Stage 6: Wait for a few years to collect keys
Let the construction begin!
Image credit: Member of Aug’20 BTO Telegram group
After going through the tedious application process, learning one step at a time and finally putting down the down payment, we were in line to become homeowners – hurray! And that was the no doubt most exciting part of our adulting and relationship journey thus far. It is a huge financial commitment, so in the mean time, carving out our careers and making sure we’ll be ready to finance it is our priority.
Applying for a BTO flat
Before you hop onto the BTO bandwagon, a ton of research, eligibility checks and budgeting is paramount in ensuring that you’re making an informed decision. There’s a myriad of reasons why couples eventually drop out, or worse, forfeit their down payment – such as financial setbacks or the end of the relationship.
Given the wait and our inability to predict the future, we can only do our due diligence and cross our fingers. BTO isn’t for everyone, as there’s a certain degree of gamble involved – so do look at the other options and weigh them accordingly.
This article was originally published on 3rd September 2021, and updated on 18th September 2023.
Cover image adapted from: Aug’20 BTO Telegram group, kpo & czm
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