HDB HFE Letter: Application takes 1 month, valid for 9 months

If you are considering a purchase of your own HDB property, you may have heard that you will first need a HLE or HFE letter. But what exactly do HLE and HFE stand for and why do you need them?

What is the HLE letter?

HLE is an acronym for HDB Loan Eligibility (HLE). It is a letter that shows your eligibility for a HDB housing loan detailing the maximum loan amount, repayment period, and monthly installments.

It was a document required for purchase of new BTO flats and also resale HDB flats. For new BTO flats, the HLE application had to be done after receiving a queue number and before booking a flat. For resale flats, the HLE letter was required before obtaining an Option to Purchase (OTP).

However, the HLE letter has been replaced as of 9 May 2023, and the new letter is now known as HDB Flat Eligibility (HFE) letter.

Similar to the HLE letter, HFE is required for purchase of BTO and resale flats. The biggest difference between the HLE and HFE is the scope of assessment. In the HFE letter, you will be able to see your eligibility for:

• Purchase of a HDB flat
• CPF housing grants
• HDB housing loan

With the HFE letter, you will no longer need to submit multiple applications for eligibility, grants and loans separately, easing your process of planning a HDB purchase.

Do I need a HFE letter?

If you are planning to apply for a new BTO or SBF (Sale of Balance Flats), you will need the HFE letter before the application exercise.

For purchase of a resale flat, the HFE letter is required before obtaining the Option to Purchase (OTP) and also before submitting the resale application. Without the HFE letter, the seller is not permitted to issue an OTP. This is to ensure that the seller is aware of your financial capabilities to proceed with the purchase.

After the OTP is released and you have paid the Option Exercise Fee, both you and the seller must submit the resale application within 14 calendar days of each other. The HFE letter remains valid for 9 months, so you will not need to reapply for a new one.

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How to apply for a HFE letter?

The HFE letter is issued by HDB and can be done completely online with your Singpass login. Here are some documents that you will need to prepare beforehand:

• Singpass login
• Marriage, birth certificates
• Proof of household income (payslips, CPF statements or tax returns)
• Other relevant documents (current property ownership, proof of divorce or separation)

Here’s a HFE Letter Application step by step guide:

1. Log in to the HDB portal with your Singpass here.
2. Click on e-Services tab then Residential in the dropdown
3. Find and click on the HDB Flat Eligibility (HFE) Letter-Preliminary Check, Application & Status
4. Answer the questions accordingly. It should take around 25 minutes to complete the form.
5. Upload the necessary documents.
6. Submit the application

How long does it take to get an HFE letter?

After the submission, HDB will review your HFE Letter application and it usually takes around 2-6 weeks, depending on the complexity of your case. If the documents are incorrect, it may also delay the review.

Once your HFE letter is approved, you can log in to the HDB portal and download the e-copy. The letter should include your eligibility to buy a HDB flat, the CPF grants and maximum HDB loan that you are eligible for.

The HFE letter is valid for 9 months from the date of issue.

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How is the HFE calculated?

1. Flat Eligibility

Depending on the details you have submitted, at least one buyer must be a Singapore citizen and the family nucleus (married couple or parents with children) must meet HDB’s requirements.

2. Income

The household’s gross monthly income is calculated and checked against income ceilings for flat types (eg. 4-room or 5-room flat) and grants. The income ceiling may range from $7,000 to $21,000 depending on the flat type and scheme (eg. singles 2 room flexi, multi-generational household) that you are applying for.

3. Loan

The maximum loan amount is calculated based on the Total Debt Servicing Ratio (TDSR), remaining lease of the flat and the applicant’s age and loan period. It is also calculated using your monthly income.

The Mortgage Servicing ratio for HDB loans is capped at 30% of the monthly household income and any outstanding loans will affect the DSR calculation.

While HDB loan tenure is capped at 25 years or up to age 65, the loan eligibility also depends on the lease that is left on the flat, which will need to be sufficient enough to cover the youngest buyer until the age of 95.

4. Housing Grants

Enhanced CPF Housing Grant is calculated based on the income bracket and eligibility criteria. The average gross monthly household income over the past 12 months is used. Some grants are specific to flat types such as BTO or resale, or locations such as flats near your parents.

Planning a HDB purchase may seem complicated and tiresome especially with the different policies and schemes available. However, the application of the HFE is very intuitive and it will help you to understand your eligibility to purchase better.

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