Although the SOP for buying an HDB BTO flat has been well-documented, buying a flat via HDB's Sale of Balance Flats (HDB SBF) or Re-offer of Balance Flats (HDB ROF) is a little less talked-about.
And with HDB now making "balance flats" available all year round - no need to wait for the next launch, hooray! - we thought it'd be a great time to make this knowledge publicly available.
Read on to find out how to apply for an HDB SBF or ROF flat in Singapore.
FIRST OF ALL, WHY WOULD YOU BUY A "BALANCE FLAT"?
As alluded above, the main advantage that buying a balance flat gives is the chance to "jump the [BTO] queue".
HDB BTOs are launched only a few times a year, and they may not be located in the estate you want. For example, the upcoming BTO launches for 2019 are in Punggol, Tampines, Tengah, Ang Mo Kio and Tampines. Tough luck if you're hoping for a place near your parents in Clementi.
Even if HDB has released a suitable location this time round, there's no guarantee you'll get a flat because everyone has to go through the dreaded balloting process. Getting invited to select a flat in a "hot" BTO development like Boon Keng is like striking 4D.
Finally, after you manage to secure a BTO flat, there's still a long-a** wait of at least 3 to 4 years for most BTOs. That's another 1,460 days you have to spend living at your in-laws' place.
… 'Nuff said.
Key advantages of an HDB Balance Flat include:
- More locations to choose from: Not limited to the 3 or 4 areas in the current BTO launch
- Shorter wait: Because the flat is already under construction (in some cases, ready to move into)
- Easier to gauge chances: You can see how many flats are available for your ethnicity
But there are also big disadvantages, such as:
- Slim chances: Because the supply is much smaller than HDB BTOs, the chances of a successful application can be slim
- Less choice: Want a high floor corner unit? These might have been snapped up by BTO buyers
- Ethnic quota restrictions: Flats may not be available for certain races, especially Chinese
- No cost savings: Sadly, HDB doesn't have a "reduced to clear" policy for their unsold flats. In fact, balance flats may sometimes cost a bit more
SALES OF BALANCE FLATS VS RE-OFFER OF BALANCE FLATS - WHAT'S THE DIFFERENCE?
Okay, we've been talking about "balance flats" in general, but actually, there are two types.
HDB Sales of Balance Flats (SBF): The first type is HDB SBF, which comprises flats left over from previous HDB BTO launches. These either did not get selected by the BTO ballot winners, or were selected but later given up (e.g. if the applicants decided to break up or go for another flat). There's also a small number of flats that are leftover from SERS, and/or older flats repossessed by HDB.
HDB Re-offer of Balance Flats (ROF): These are the flats left over from the previous HDB SBF exercises - which, to put things bluntly, makes them leftovers twice over. Again, they either had no takers among the successful SBF applicants, or they were selected but later given up.
|HDB Sales of Balance Flats||HDB Re-offer of Balance Flats|
|When it’s available||Twice a year (e.g. May & Nov)||All the time|
|Application period||1 week (during sales launch)||Open throughout the year|
|What flats are available||Leftover flats from previous HDB BTO launch||Leftover flats from previous HDB SBF launches|
|How many units||Around 3,000 units||Currently about 100|
|Unit mix||Most unit types available||Limited unit sizes|
|Locations||Mature & non-mature estates||Mature & non-mature estates, but only a few in each|
|Ethnic quota||Fairly spread out among races||Very few units for Chinese buyers|
The balance flats that HDB recently made available to the public at all times? That's the Re-offer of Balance Flats a.k.a. HDB ROF, which, like I mentioned, are the balance flats of the balance flats.
Naturally, they are NOT for fussies. If you are super duper particular about being on the top floor or the fengshui of your unit, then it goes without saying that you should probably give this a miss.
Instead, ROF flats are meant for those in more pressing need of housing, and don't mind taking a look at what's available.
The greatest advantage is that the waiting time for ROF way shorter than both SBF and BTO. If successful, you can get invited to HDB to select your flat as early as the same day of your application! That's crazy efficient.
Plus, since they are farther along in the HDB BTO timeline, you can expect a much shorter wait for ROF flats to be built. Some might even be available to move into already.
WHAT ARE HDB SALES OF BALANCE FLATS (SBF) LIKE?
HDB SBF launches happen twice a year, and coincide with BTO launches. For example, the most recent SBF launch was in May 2019, at the same time as an HDB BTO launch. The one before that was in Nov 2018.
So that means you have twice the chances, right? Wrong. Unfortunately, you have to choose either the BTO or SBF route - applying for both during the same launch is not allowed!
One thing that makes HDB Sales of Balance Flats very different from applying for a BTO is the sheer variety and depth of information provided.
With HDB BTOs, it's a leap of faith. All you really need to do is to choose your preferred location and flat size. HDB provides just the generic map, so you just have to hope that it'll live up to your expectations.
But with the SBF, HDB provides a ton of information, right down to the block number (so you know exactly where it is), unit number (so you know which floor it's on), and the ethnic quota (so you know whether you got chance or not).
Plus each batch has some 3,000 units across virtually all flat types and locations, which can really send you into decision paralysis.
Fortunately, each SBF launch is about a week long, so you and your partner/family can take your time (sorta) to carefully review the information available and make your choice. You can only choose one location and one flat type, so please weigh all the factors - including flat supply! - carefully.
As for the flat itself? Well, it's the same as the other BTO flats in your block lah, although possibly on a low floor or facing West or some other factor deemed as "dealbreaker" by a picky buyer. To take a case study, my colleague bought a low floor flat in Punggol through an SBF exercise, and the wait was only one year.
HOW DO YOU APPLY FOR HDB SALES OF BALANCE FLATS (SBF)?
We've talked about how the time frame for HDB SBF is the same as that of BTOs - and whaddyaknow? It turns out that application procedure is similar as well.
Step 1: Check eligibility. The eligibility criteria, income ceiling, and housing schemes that apply to BTOs also apply to Sales of Balance Flats. For a recap of the criteria, see our step-by-step guide to applying for a BTO or HDB's official eligibility page.
Step 2: Apply for your flat. Hopefully you have digested all the information available on HDB's SBF page and made your decision. If so, you may submit a simple online application on the sales launch page, and pay a $10 admin fee. This needs to be done within the 1-week window that HDB usually gives for their BTO/SBF launches.
Step 3: Wait for results. After application closes, prepare to spend the next few weeks in an insomniac state as HDB conducts the balloting process. This is basically a lottery, but HDB has set it up in such a way that your chances are better if you are a first-time applicant, applying as a couple or family. If eligible for one of the HDB priority schemes (e.g. for living near your parents), you can improve your chances.
Step 4: Get your home loan in order. Meanwhile, you'll want to prepare for a home loan since you'll need one to secure your flat. If you're planning to get an HDB loan, you need to apply for an HLE (HDB Loan Eligibility) letter. For a bank loan, you'll have to ask for an AIP (Approval in Principle) letter from the bank.
Step 5: Hear from HDB. At the end of about 3 weeks, you'll get a letter from HDB with your ballot queue number. If it's something ridiculous like #1,735 then GG lah, better luck next time. But if your queue number is reasonably small, you get an appointment with HDB for the event of the year: Your SBF flat selection. *pops champagne*
Step 6: Go to HDB and book your flat. At HDB Hub, you'll be shown what's available to you, and, if you like what you see, you can book it on the spot (must pay an option fee of $500, $1,000 or $2,000, depending on the size of your flat). Once you have your finances in order, you can come back and sign the official lease agreement and make the downpayment of 10 per cent (HDB loan) or 20 per cent (bank loan) of the flat price.
Step 7: Key collection. Assuming all goes well, the next time you'll hear from HDB is when your key is ready. Hurray! Depending on how far along your flat is in the construction process, key collection day can be as early as within 3 months (if it's already complete) to 2+ years (if it's a previously-unsold BTO).
HOW DO YOU APPLY FOR HDB RE-OFFER OF BALANCE FLATS (ROF)?
Because HDB ROF (Re-offer of Balance Flats) is now available all year round, there is no need to wait till HDB launches a BTO to apply for one or go through the whole balloting process - it's simply first come, first served.
You can do it anytime, provided you can find one that you qualify for and suits you. Be warned: There aren't a whole lot of options with this one!
At last count, there are less than 100 Re-offer of Balance Flats to choose from. Of these, Chinese buyers have just 9 units to choose from, whereas minority ethnicities are eligible for most of the flats.
If you qualify, you'll be very pleased to know that the HDB ROF application procedure is short and simple.
Step 1: Check your eligibility. As with all flats bought directly from HDB, you need to meet certain age/family/income requirements, so check your eligibility here before applying.
Step 2: Settle your loan. At the same time, you should also obtain an HDB Loan Eligibility letter or loan Approval in Principal letter from your bank. Things move at lighting speed with ROF, so you should prepare all the admin ahead of application.
Step 3: Apply for your flat. No need to wait around for an auspicious date, because HDB ROF units are first come, first served. This means that if you see anything you like and have fulfilled all the eligibility requirements, you should apply online immediately. The usual $10 admin fee applies.
Step 4: Get an appointment with HDB. Immediately after application, you'll receive a queue number and an appointment to book your flat. This can be as early as the same day of your application (if you book before noon on a weekday - otherwise, it's the next working day). So it's best to clear your schedule on application day!
Step 5: Book your flat. During your appointment with HDB, you can go ahead and book the flat by paying a $500, $1,000 or $2,000 option fee (depending on flat size). If opting for HDB loan, you also need to submit your HLE letter while booking
Step 6: Sign lease agreement. The next HDB appointment is to sign the official agreement. You will want to make sure you have enough cash/CPF on this day, because it's also when you'll be making the downpayment (10 per cent or 20 per cent of your flat), plus legal and stamp fees (1 per cent to 3 per cent of the flat).
Step 7: Key collection. If the flat you booked is already complete, you can collect your keys on the same day as signing the lease agreement. Talk about efficient! Otherwise, you will need to wait till the block is constructed and then collect your key.
WHAT IF YOU RUN INTO CASHFLOW PROBLEMS?
With an HDB BTO, you have what seems like all the time in the world to save up for your downpayment and sort out your finances.
But due to the chop-chop nature of HDB SBF and ROF, some applicants may run into cashflow issues. To help with that, HDB has a few concessions.
- Deferment of HLE: For HDB ROF, if you're fresh out of school or NS (within 12 months), you don't need to submit your HLE when booking your flat. You can defer your income assessment until 3 months before key collection - HDB will notify you to submit your income documents then.
- Staggered Downpayment Scheme: First-timer couple applicants under 30 years old, or current homeowners looking to downsize to a smaller flat, can request for the downpayment to be paid in 2 halves. Assuming you go for an HDB loan, this means you only need to pay 5 per cent when you sign the lease agreement, and the other 5 per cent at key collection.
- Deferred Downpayment Scheme: For elderly (age 55 and up) homeowners looking to downsize their current flat to a smaller home, your downpayment due date will be automatically extended until key collection date. When signing the lease agreement, you will only need to pay the stamp duty and legal fees (1 per cent to 3 per cent of flat).
- Temporary Loan Scheme: If you're in the midst of selling your current flat and want to use the proceeds to pay for your new flat, this scheme allows you to get a short-term loan from HDB to help with the cashflow while you wait for the sale proceeds to come in.
This article was first published in MoneySmart.