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Thursday, April 16, 2015

A Singles Guide to Buying a BTO

Several of my single (some unavailable) peers are nearing their 35th birthday and many of them are contemplating diving straight into their bachelor pads when they are of eligible age. Knowing that there will be a handful of users who would have some burning questions regarding the eligibility and qualifying criteria for the Build-To-Order (BTO) application under the Singles Citizen Scheme, i decided to write a short guide, to compile some of the important facts you would need to know before making your purchase!

HDB Design
Image Credit: Space Sense Studio Pte Ltd

Eligibility



There are two main caveats for eligibility to apply for a Singles BTO. Firstly, your average gross monthly salary must not exceed $5,000.00. Secondly, you cannot be a joint owner/owner of another HDB or Private Property. For the case of the latter, you would be given a time frame to dispose of your existing private property after successfully applying for the BTO.

For those who do not even qualify due to the salary ceiling, congratulations to you! As you would be classified in the group of medium - high income earners. Unfortunately, a brand new BTO is out of bounds and your only options are the HDB resale or the private property markets.

Location



Bad news for the singles who are looking to buy a bachelor pad that is located in a convenient and matured district. Aside from the size restriction, which we will discuss in the next section, HDB only allows singles to buy BTOs from non-matured estates.

Based on the definition given by HDB, a matured estate refers to an estate that is in existence for more than 20 years. Examples of non-matured estates are listed as follows (Bukit Batok, Bukit Panjang, Chua Chu Kang, Hougang, Jurong (East/West), Punggol, Sengkang, Sembawang, Woodlands, Yishun). 

Size


There is a size restriction on Singles buying BTOs. HDB currently only allows Singles (at 35) to purchase 2 Room BTO developments. At a measly 45 square meters, you would be pretty much restricted to basically a 1 bedroom, 1 kitchen bachelor pad. 


Take a look at how a typical 2 room BTO flat would look like.

Time


Typically, the time taken from application, to receiving the keys is usually a good three to four years. At 35, most singles would be eager to move out and start living lives on own. Yet, having to wait for the BTO construction to complete for another 3-5 years would not be too enticing. 

If time is of the essence, one could consider going straight into the resale market.



Grants



Singles under SSC, NCS and FT/ST couples
Singapore Citizen (First-timer) IncomeAHG (Singles)SHG (Singles)Total
Up to $750$20,000 $10,000 $30,000
$751-1,000$17,500 $27,500
$1,001-1,250$15,000 $25,000
$1,251-1,500$12,500 $22,500
$1,501-1,750$10,000 $20,000
$1,751-2,000$7,500 $17,500
$2,001-2,250$5,000 $15,000
$2,251-2,500$2,500 $12,500
$2,501-2,750-$7,500 $7,500
$2,751-3,000-$5,000 $5,000
$3,001-3,250-$2,500 $2,500

Selective grants are given by HDB for applicants whose monthly salary does not exceed $3250. The lower your salary, the higher the grants you will be eligible for.  


* You can read more about the HDB housing grants for Singles.

The Application Process



Once you are eligible to qualify for a singles BTO, look out for some of the BTO launches from HDB. When a desired development shows up (Example: SengKang, Sun Breeze, register for the electronic ballot by applying online.

Upon completion of the computerised balloting, you will be informed of the results of your application. If there is a realistic chance of getting a unit, you will be invited to HDB Hub at Toa Payoh for an appointment. 

During your appointment, you will face a nervous wait to select your desired unit and floor. There will be several flat screen monitors displaying the available units, as well as those that have been selected by applicants with a lower ballot number (i.e, those ahead of you). 

After selecting a unit, you will be required to pay the Option-To-Purchase (OTP). This is a non-refundable deposit that will be forfeited in the event you so decide to back out on your decision. For a 2 room flat, the OTP costs 500$ and has to be paid in CASH or NETs. 

Subsequently, you will be asked to pay the down payment of the house (Depending on the type of loan: Bank Vs HDB). Fast forward 3-4 years later, when the construction is completed and just before you receive your keys. You will be required to deplete your CPF ordinary account, which goes to the payment of your BTO flat. This is also when you begin your monthly loan repayments.


Finally, when you have moved in, you will be required to stay for a minimum of 5 years before you can sell or rent out your flat. 

Happy house hunting!