Executive condominiums are private homes for the middle income bracket of Singaporeans, those who can afford better than a HDB Flat but find private properties too expensive to obtain. Executive condominiums are a cross between private condominiums and HDB flats; they enjoy all the benefits of a private condominium such as shared facilities and swimming pools; but are governed by the Housing & Development Board’s (HDB) restrictions.
The beauty of Executive Condominiums is that after owning a unit for 10 years, it becomes private property. These developments can usually be found in matured towns outside of the city, such as Punggol, Woodlands and Sengkang. Compared to HDB Flats, there are far fewer of these developments around with only about 5 available executive condominiums to choose from at any one point of time.
So how do you go about getting an Executive Condominium in Singapore?
Step 1: Check Your Eligibility
The first step is to ensure that you qualify to purchase an Executive Condominium – because inasmuch as it becomes private property in 10 years, its sale condition is still governed by the HDB. You will need to fulfil the below criteria:
- Be at least 21 years of age
- Must be a Singaporean Citizen (SC)
- At least 1 other applicant must be an SC or Singaporean Permanent Resident
- Gross household monthly income must not exceed $14,000
- Must not own a private residential property at the time of application
- Must not have disposed of a private property either locally or overseas in the last 30 months
- Must not have purchased a new HDB/ DBSS flat or Executive Condominium, received a CPF
- Housing Grant, or have bought one of these properties/received a CPF Housing Grant before
- Must not have cancelled a HDB application or terminated the Sales & Purchase Agreement (S&P) for a DBSS flat/EC using a CPF Housing Grant before, in which case the applicant will be barred for either 1 year or 5 years respectively
You must also qualify for at least one of the below HDB eligibility schemes:
- Public Scheme
- Fiancé/Fiancée Scheme
- Orphans Scheme
- Joint Singles Scheme
All singles must be a minimum of 35 years old if they are applying under the Joint Singles Scheme. For more details on the above schemes, check the HDB website here, and the full list of Executive Condominium (EC) criteria here.
Step 2: Sort out Your Finances
After ensuring that you fulfil the above criteria, the next step will be to ensure that your finances are in order. EC home buyers will need to valuate their financial situation, because HDB does not provide loans to EC home buyers, and applicants will need to source their loans from banks or other financial institutions.
Get an Approval-in-Principle (AIP) from the Banks
The amount of loan you can obtain from the banks will be subject to your Total Debt Servicing Ratio, Mortgage Servicing Ratio, credit history and existing loans. Hence the safest way to know how much the banks will loan you is by getting an Approval-in-Principle (AIP) from the bank. Do however get AIPs from different banks, as every bank has different loan principles – one bank may be able to give you a better offer than another bank.
Evaluate your CPF Account
Many EC home buyers opt to utilise the money in their CPF Ordinary Account. In these cases, the applicants are usually able to withdraw the savings in their Ordinary Account up to the Valuation Limit, which is either the value of the property at the time of the purchase or the lower purchase price.
There are however restrictions to the withdrawals if this is your second or subsequent property purchase, as you will be required to set aside the minimum Basic Retirement Sum. In these cases, you can only withdraw the excess after deducting the Basic Retirement Sum amount.
Take into Account Miscellaneous Fees and Resale Levy (If Applicable)
There will be various miscellaneous fees to bear when you buy an Executive Condominium. The biggest cost will be the 20% downpayment which is inclusive of a 5s Option Fee and a 15% Exercise Fee, which you will be required to fund yourself. The downpayment can be funded by a mixture of your own cash and CPF withdrawal.
Other incidentals includes the Buyer’s Stamp Duty (BSD), as well as various Legal Fees. On top of this, if you have received a CPF Housing Grant or purchased a HDB Flat before, you will be charged a resale levy of $55,000 when you purchase your new Executive Condominium. Another fee that applies only to Singaporean Permanent Resident applicants is the Additional Buyer’s Stamp Duty.
Step 3: Shop for Your Executive Condominium, Visit a Showroom
Once you’ve gotten your finances sorted out, you can begin shopping! The first thing to do is to visit the HDB website and check out the available EC developments in Singapore. From here, you can shortlist the most desirable one, contact the developer for more information, and then visit the show flat. Do however note that many developers will require you to fill up an e-application before you get an invitation to the showroom.
Step 4: Bring along the Required Documents and Submit Your Application
Upon selecting your desired unit, the next step would be to submit your documents – if the development is already launched. If the Executive Condominium is not launched, you will need to submit your application online via the e-Application.
The e-App registration is however only a registration of interest, and registrants are under no obligation to purchase the unit until they view the show flat. Registrants on the e-App will have the benefit of being on the priority viewing and booking list upon completion of the showroom.
Step 5: Book Your Executive Condominium (select a unit if you are shortlisted)
The shortlist process for Executive Condominiums buyers are similar to HDB Flats – by ballot. If you are successfully selected as a purchaser, bring along the necessary documents to the unit viewing, hence once you make your selection, you can immediately book your unit. You will need:
- Proof of identity/citizenship
- Proof of income
- Proof of relationship/marital status
- If eligible, CPF Housing Grant application form
If the Executive Condominium buyer is using a CPF Housing Grant to fund the downpayment of his unit, he will need to submit the documents within 1 week to the developer or risk not being able to use his CPF Housing Grant to fund his downpayment.
For a complete list of documents to bring, visit the HDB official website.
The initial downpayment will be 5% (Option Fee) of the property price, which in handing over the payment, the buyer will secure his Option to Purchase. The developer will then hand over a set of Property Details Information (PDI) – a document that details the offered items, floor plans, rules and regulations, and various other details pertaining to the unit. The buyer will be asked to study the PDI document, and agree with the terms and conditions by initialling it on every page.
Thereafter, all the PDI and other submitted documents will be sent to HDB for approval, a process that will take between 3 to 4 weeks. And within this period, applicants who utilise their CPF Housing Grant, will need to send the CPF Withdrawal Form RPS/1A (Residential Properties Scheme) directly to the CPF Board for processing once their unit is booked.
Once all the pre-registrants have selected their units, then the Executive Condominium development will be open for sale to the general public.
Step 6: Appoint a Solicitor and Get the Best Loan
The 3 to 4 weeks of waiting period is an excellent time to appoint yourself a lawyer. This individual will act in your stead in regards to the legal side of your property purchase.
At the same time, start shopping around for a housing loan. Do note that every bank will give you a slightly different offer, so shop around until you get the most competitive deal. Another option is to use the developer’s panel bank, but it is always a good idea to find the best deal for yourself.
Once you settle on a bank, secure a Letter of Offer (LO). You will need to provide a copy of your Option to Purchase document, as well as the other usual documents. Once you receive your LO, wait until your Executive Condominium application is approved before you sign it.
Step 7: Get Your Sales & Purchase (S&P) Agreement and Sign It
Now all you will have to do is wait for either the good news or the bad news from HDB. If your application was not successful – don’t worry, you’ll now have another chance to go shopping!
But if your application is successful, then congratulations! You will receive your Sales & Purchase (S&P) document shortly, and then you will have another 3 weeks to decide whether you want to sign on the dotted line. If you decide not to, you will forfeit a portion of your Booking Fee – the amount is dependent on the agreement in your Option to Purchase.
But if you decide to go ahead on your purchase, this is when you will need to pay the remaining 15% of the downpayment (the Exercise Fee); or 9 weeks after your Option to Purchase; whichever comes first. And within 2 weeks of signing your S&P, you will need to pay the Stamp Duty on your S&P.
Step 8: Begin Paying for Your Executive Condominium (payment scheme begins)
Upon completing your S&P exercise, sit back and wait for your Executive Condominium to be completed. In the meantime, you can opt to use either one of the below repayment schemes:
Normal Payment Scheme (NPS)
The Normal Payment Scheme (NPS) is the typical payment scheme where the property buyer makes a payment every time the EC development hits a construction milestone. This usually works out to about 5% to 10% of the purchase price in every 6 months or so.
Differed Paying Scheme (DPS)
This option allows buyer to pay only the 20% downpayment, and then sit back and relax until the development is completed before they begin making payment. This scheme will however ultimately cost about 2% to 3% more than the purchase price, hence many EC buyers prefer to stick to the NPS scheme.
Step 9: Collect Your Keys!
Once your EC development is completed, wait for the developer to get a Temporary Occupation Permit (TOP) for the development, collect your keys and move in! You will now be a proud owner of an Executive Condominium, which will become a private residential property in 10 years.
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