- A valid HFE letter is needed before the seller can grant you an Option to Purchase.
- HDB's prescribed OTP sets limits on the option fee and deposit and fixes the option period.
- Any price above HDB's valuation must be paid in cash, not with a loan or CPF.
- You need a private lawyer if you are taking a bank loan; HDB acts only where an HDB loan is used.
Before you start looking
Buyers need an HDB Flat Eligibility (HFE) letter, which confirms your eligibility to buy a resale flat and, where relevant, to take an HDB loan and receive housing grants. HDB's resale terms require the buyer to hold a valid HFE letter when the seller grants the Option to Purchase, so it is worth applying early.
Eligibility depends on factors such as citizenship, household and income, and on HDB's policies for the particular block. HDB can reject a resale if either side stops meeting its conditions before completion.
The Option to Purchase
Once a price is agreed, the seller grants an Option to Purchase using HDB's prescribed form rather than a privately drafted one. At the time of writing, HDB's terms set the option fee at no more than $1,000 and the total deposit (option fee plus exercise fee) at no more than $5,000. The option period is 21 calendar days, and it expires at 4pm on the last day.
To go ahead, you exercise the option within that period and pay the exercise fee. The sale remains subject to HDB approving the resale application.
Valuation and cash over valuation
HDB assesses the flat's value as part of the process. This matters because the valuation, not the agreed price, limits how much can be financed by a loan or CPF savings. If the agreed price is higher than the valuation, the difference (often called 'cash over valuation') must be paid in cash.
It helps to know this before you exercise the option, while you can still raise it with the seller.
The resale application and completion
After the option is exercised, the process runs largely through HDB's online portal:
- The buyer and seller each submit their parts of the resale application.
- Once HDB accepts the application, both sides endorse the resale documents online and pay the fees due.
- HDB reviews the application, checks eligibility and gives its approval.
- Both parties attend the completion appointment. Where a party has a lawyer, the lawyer can attend on their behalf.
- At completion, the balance is paid from CPF, the loan and any cash, and the keys are handed over.
Law firm guides at the time of writing describe completion as commonly taking place about eight weeks after HDB accepts the resale application, though eligibility or financing issues can extend this.
Do you need your own lawyer?
HDB can act in the conveyancing where the buyer is taking an HDB housing loan and no bank financing is involved. You will need a private conveyancing lawyer in situations such as:
- You are buying with a loan from a bank or other financial institution, which will require a law firm on its panel to act on the mortgage.
- The seller has a bank loan that must be redeemed on the sale.
- The transfer arises from a divorce court order or another situation where HDB requires private solicitors.
Some buyers also choose a private lawyer for independent advice even when it is not required. A lawyer can review the OTP, plan your CPF and loan arrangements against HDB's timeline, and attend the completion for you.
A lawyer can review your situation and explain your options.
This article is general information on Singapore law and is not legal advice. Rules and agency policies change, and every situation is different. For advice on your own circumstances, speak with one of our lawyers.
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