A Singaporean's Guide to HLE Application and Getting the HDB Loan Eligibility (HLE) Letter for Your HDB Home Loan

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08 Sep 2020

Looking to buy an HDB flat?

Unless you are a Singaporean Billionaire and can pay for the whole flat in cash, there’s a high chance you will need to get a home loan.

Speaking of home loans, when it comes to home loans in Singapore, you can choose either an HDB loan or Bank loan for your flat.

P.S. Check out our comparison of HDB loans vs Bank loans if you are still undecided on which loan to take.

If you have decided to take an HDB loan/HDB Concessionary Loan instead of a bank loan, you will need an HDB Loan Eligibility (HLE) Letter before you can proceed with the application for Your HDB Home Loan.

As such, here is our guide to everything you need to know about the HLE application process and how to get an HDB Loan Eligibility (HLE) Letter.

Here We Go!

What is HLE Application?

The journey to getting your HDB home loan starts with checking eligibility.

HDB Housing Loan Eligibility Criteria

As applicants, you and/or your family members will have to meet the following eligibility conditions before you can apply for an HDB loan:

Criteria	Conditions
Citizenship	At least 1 buyer is a Singapore citizen
Household Status	- Have not previously taken 2 or more housing loans from HDB - Have taken 1 housing loan from HDB and the last owned property is not a private residential property (local or overseas) such as: HUDC flat Property acquired by gift Property inherited as a beneficiary under a will or as a result of the Intestate Succession Act Property owned/ acquired/ disposed of through nominees
Income Ceiling	- Average gross monthly household income does not exceed: $14,000* for families $21,000* for extended families $7,000* for singles buying a 5-room or smaller resale flat or a 2-room new flat in a non-mature estate, under the Single Singapore Citizen (SSC) Scheme - If an applicant or occupier is unemployed for less than 3 months, his/ her average income will be computed based on the actual number of months he/ she has worked.
Ownership/ Interest in Property	- Must not own or have disposed of any private residential property in the 30 months before the date of application for an HDB Loan Eligibility (HLE) letter. - A private residential property (local or overseas) will include: Property acquired as a gift Property inherited as a beneficiary under a will or as a result of the Intestate Succession Act Property owned/ acquired/ disposed of through nominees -Do not own more than 1 market/ hawker stall or commercial/ industrial property If only 1 market/ hawker stall or commercial/ industrial property is owned, you must be operating the business there, and have no other sources of income
Remaining Lease	Remaining lease of flat is >20 years + Covers youngest buyer to age	HDB Housing Loan
	≥ 95 years	Allowed, subject to: Loan-to-Value (LTV) limit* of 90%; and Loan tenure is the shortest of: 25 years; 65 years minus the average age of the buyers; or Remaining lease at the point of flat application** minus 20 years
	< 95 years	Allowed, subject to: LTV limit of 90% is pro-rated based on the extent that the remaining lease can cover the youngest buyer to the age of 95; and Loan tenure is the shortest of: 25 years; 65 years minus the average age of the buyers; or Remaining lease at the point of flat application+ minus 20 years

Source: HDB

Notes:
^*The Loan-to-Value *(LTV) limit refers to the maximum amount of loan a flat buyer can take up, expressed as a percentage of the purchase price or flat value.

^**For flat applications received before 10 May 2019, the HDB housing loan may be reduced or even disallowed if you are buying or taking over ownership of a flat with a remaining lease of fewer than 60 years.

HDB Loan Income Ceiling for Extended Family

If you are applying with your extended family, the household income is calculated in this manner:

Category	Income of Group A (Income cannot exceed $14,000* per month)	Income of Group B (Income cannot exceed $14,000* per month)	Income Ceiling of Extended Family
Parents^ with single children	Parents with 1 single working child	Other single children	Total income of Group A and Group B must not exceed $21,000
Parents^ with married child+	Parents with any single working children	Married child's** family

Source: HDB

^{^} Includes widow/ widower or divorcee

^*For HLE applications and flat applications received before 11 September 2019, the income ceilings are $12,000 for families and $18,000 for extended families.

^**Includes applicants applying under the Fiancé/Fiancée Scheme

Here is an example of how this works:

A married couple with two single working children would like to obtain an HDB home loan to buy an HDB flat. Their average gross monthly income is as follows:

Husband = $4,000
Wife = $4,000
Child 1 = $10,000
Child 2 = $3,000

Their average gross monthly income as an extended family works out to be as follows:

Group A Income The income of Parents and 1 of the children cannot exceed $14,000*	Group B Income Remaining children income cannot exceed $14,000*	Income Ceiling of Extended Family Total income of Group A and Group B must not exceed $21,000*
Husband + Wife + Child 2 = $11,000	Child 1 = $10,000	$21,000 The extended family is able to meet the income ceiling.

^*For HLE applications and flat applications received before 11 September 2019, the income ceilings are $12,000 for families and $18,000 for extended families.

HDB Loan Eligibility Check

There are many permutations to this, so just to be sure, you can head over to the HDB site to perform an HDB loan eligibility check.

HDB Credit Assessment Criteria

Now that you’ve found out if you have met the necessary conditions, the next step will be to check if you fulfil HDB’s credit assessment criteria.

As lenders, HDB requires that buyers will need to have stable work and regular income.

Basically, the more stable your income, the smoother your application process

HDB Loan CPF Contribution: Monthly CPF Contribution

If you are earning an income with monthly CPF contribution, you will have to fulfil the following criteria for credit assessment.

Be continuously employed for at least three months if basic salary is fixed.

Be continuously employed for at least six months if basic salary is variable.

HDB Loan CPF Contribution: Irregular CPF Contribution

However, if you are a self-employed person without monthly CPF contribution, you will need to meet stricter criteria:

Be continuously employed or trade for at least 6 months.

AND

Have good credit standing.

Have consistent positive cash flow (income) for at least six months. This money can be used to service a housing loan. HDB will assess your bank statements to determine this.

Now you are almost ready to apply for an HDB Loan Eligibility Letter (HLE)!

But before that, here’s a primer about the letter.

What Is An HDB Loan Eligibility Letter (HLE)?

Basically, the HLE letter is an in-principle approval that HDB will grant you a loan. It is proof that you qualify for an HDB loan based on the documents and information you submitted for the application.

Regardless of whether you are buying an HDB BTO (build to order) flat or Resale flat, you will need to obtain the HDB Loan Eligibility (HLE) letter.

How Much Hdb Loan Can I Take?

In the letter, you will be able to find information like the:

Eligible loan amount.
Monthly instalments.
Repayment period.
Amount of cash proceeds from the disposal of the existing or previous flat to be used to pay for the next flat (if applying for second HDB concessionary housing loan).
Other terms and conditions.

In a sense, the HLE letter is kind of like a budgeting tool that helps you work out what type of HDB flat you can really afford, as the exact HDB loan amount you can borrow is indicated in the letter.

HDB Calculator Loan

Also, if you want to find out the amount of HDB Housing Loan you can borrow before the letter arrives, you can use this handy dandy HDB loan calculator.

But ultimately, the HDB loan amount you can borrow is dependent on these four factors:

Credit Assessment.
LTV Limit.
Remaining lease of flat you are buying or taking over.
Other HDB policies that are applicable at the point of the flat application.

What Do I Need The HLE Letter For?

If you want to purchase a BTO flat, you will need to obtain your HLE letter before your first appointment.

An important thing to take note of is that for BTO buyers, your financials will be assessed twice: the assessment will be before your purchase of the flat and the second assessment will be nearer to the date of the flat’s completion.

As such you will need to ensure that your financial situation and ability to service the loan has not worsened. So do plan your finances well.

P.S. Check out our Seedly Money Framework Guide to start…

For resale buyers, you will need the HLE letter before you sign the Option to Purchase (OTP) and pay the option fee as a deposit and submitted a resale application.

Also, you will need the HLE letter before you can apply to take over the ownership of a flat (by way of transfer).

HLE Letter Validity

Do note that the letter is valid for six months after the date of issue, barring changes to the financial situation of the applicants.

You can also request to ‘renew’ your HLE letter by applying for a new letter, one week before your current HLE letter expires if needed.

Once you have assessed that you are eligible for the HDB housing loan and fulfiled the credit assessment criteria, you can proceed to apply for an HDB Loan Eligibility (HLE) letter and upload the supporting documents online.

How Do I Get an HLE Letter?

The process is simple:

Ensure that all applicants have a valid Singpass.
Prepare this list of income and supporting documents in either PDF or JPG format, and limit each file to below 5MB.
Head over to the HDB website.
Complete the application process.

Voila, you are done!

An important thing to note that is that HDB will only process the application within two weeks after the FULL set of documents are submitted.

So do factor this into your planning and apply for the HLE letter in advance!

Once the application is completed you can log in to My HDBPage to check the status of your HLE application under:

My Flat > Application Status > HLE.

All the best!

Got Any Questions About the BTO or Resale Flat You Are About to Buy?

Head on over to our SeedlyCommunity BTO flat discussion page or SeedlyCommunity Resale flat discussion page and a member of our savvy will be right there to help you out!

About Joel Koh

History student turned writer at Seedly. Before you ask, not a teacher. I hope to help people make better financial decisions and not let money control them.

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