Financing for Executive Condominium
Plan Your Property Financing Ahead of the Purchase
1. Payment Schemes
Purchasers of a new Executive Condominium (EC) have a choice of Normal Progressive Scheme (NPS) or Deferred Payment Scheme (DPS).
Deferred Payment Scheme (DPS) allows the purchaser to defer the 75% loan repayment till the project is ready for move in, i.e. received the Notice of Vacant Possession. No loan repayment is required before Temporary Occupation Permit (TOP) is served. However, do note that the purchase price on DPS is about 3% higher than the NPS price.
The payment schedule and the % of purchase price payable is illustrated in the table below:
| Payment Schedule | Payment (% of purchase price) | |
|---|---|---|
| Normal Progressive Scheme - NPS | Deferred Payment Scheme - DPS | |
| Upon the grant of Option to Purchase | 5% (booking fee) | 5% (booking fee) |
| Upon signing of the Sale & Purchase Agreement or within 8 weeks from the Option date | 15% | 15% |
| Completion of foundation work | 10% | - |
| Completion of reinforced concrete framework | 10% | - |
| Completion of partition walls of unit | 5% | - |
| Completion of roofing/ceiling of unit | 5% | - |
| Completion of door sub-frames/ door frames, window frames, electrical wiring, internal plastering and plumbing of unit | 5% | - |
| Completion of car park, roads and drains serving the housing project | 5% | - |
| Issue of Temporary Occupation Permit | 25% | 65% |
| Certificate of Statutory Completion (CSC) | 15% | 15% |
2. CPF Housing Grant
The CPF Housing Grant is a housing subsidy provided by the government, to assist eligible First-Timer families to buy an Executive Condominium.
The CPF Housing Grant will be credited into the eligible purchaser's CPF Ordinary Account and can be used to pay for the balance downpayment at the time of signing of the Sales and Purchase (S&P) Agreement.
| Average gross monthly household income of all persons in application, i.e. applicants and occupiers | Family Grant | Half-Housing Grant | |
|---|---|---|---|
| Singapore Citizen (SC/ SC) Household | SC/ Singapore Permanent Resident (SC/ SPR) Household | If you are a first-timer (FT) SC and your co-applicant is a second-timer (ST) who has previously taken 1 housing subsidy, i.e. FT/ ST couple | |
| $10,000 or lower | $30,000 | $20,000 | $15,000 |
| $10,001 to $11,000 | $20,000 | $10,000 | $10,000 |
| $11,001 to $12,000 | $10,000 | Nil | $5,000 |
| $12,001 to $14,000 | Nil | Nil | Nil |
If you are from an SC/SPR household, you can enjoy the full housing subsidy by applying for the Citizen Top-Up within 6 months from the date your SPR family member takes up Singapore Citizenship or the birth of your SC child. Please note that the CPF Housing Grant is subject to approval by the relevant authorities.
3. Mortgage Loan Restrictions: Loan-to-Value Limits, Total Debt Servicing Ratio, Mortgage Servicing Ratio
i) On 11 Jan 2013, the Monetary Authority of Singapore (MAS) tightened the Loan-to-Value (LTV) limits for borrowers who already have at least one outstanding housing loan.
• Exemption: For EC purchasers who have an outstanding loan on the existing flat which would have to be sold upon TOP of the EC, the housing loan for the EC purchase is regarded as the 1st Home Loan. LTV limits on 1st Home Loan will apply.
ii) On 28 June 2013, the Monetary Authority of Singapore (MAS) introduced a Total Debt Servicing Ratio (TDSR) framework for all property loans granted by financial institutions to individuals. Banks need to ensure that borrowers' total monthly debt repayments do not exceed 60% of their gross monthly income.
• Exemption: For EC purchasers who own an existing flat which would have to be sold upon TOP of the EC, the monthly instalment of the existing HDB flat will be excluded in the computation of the total monthly debt repayments.
iii) On 9 Dec 2013, the Ministry of National Development (MND) announced that MAS will cap the Mortgage Servicing Ratio (MSR) for housing loans granted by financial institutions for EC units bought directly from developers at 30% of a borrower’s gross monthly income.
4. Payment of Resale Levy on ECs (announced on 9 Dec 2013)
Source: http://www.hdb.gov.sg/cs/infoweb/residential/selling-a-flat/additional-information
i) Resale levy is applicable for EC projects where the land sale is launched on or after 9 Dec 2013
ii) Revised Resale Levy Policy
Applies to second-timer applicants who:
- Book their second subsidised flat from HDB on or after 03 Mar 2006, and
- Submit their resale application to sell their first subsidised flat on or after 03 Mar 2006
| First Subsidised Flat Type | Amount of Resale Lecy Payable under the Revised Policy (From 3 Mar 2006*) |
|---|---|
| 2-room | $15,000 |
| 3-room | $30,000 |
| 4-room | $40,000 |
| 5-room | $45,000 |
| Executive Flat | $50,000 |
iii) Previous Resale Levy Policy
Based on resale price or 90% of market valuation, whichever is higher.
Applies to second-timer applicants who:
- Booked a second subsidised flat or an Executive Condominium unit from the developer before 3 Mar 2006. This is regardless of whether they have sold or submitted a resale application to sell the first subsidised flat, or
- Sold the first subsidised flat and opted for deferred resale levy, or
- Submitted a resale application to HDB before 3 March 2006 for the sale of their first subsidised flat
| Flat Type | Resale Levy payable by family grant receipient | + Resale Levy payable by singles/half grant receipient |
|---|---|---|
| 2-room | 10% / 15% | 5% / 7.5% |
| 3-room | 20% | 10% |
| 4-room | 22.5% | 11.25% |
| 5-room & Executive | 25% | 12.5% |
Second-timers are not required to pay the resale levy for EC new launch projects where land tenders were awarded before 9 Dec 2013.
• EC Not Subject to Resale Levy (launched prior to Westwood Residences)
• EC Subject to Resale Levy (Westwood Residences EC Launch & thereafter)
Tender launch dates for EC land sales: http://www.hdb.gov.sg/cs/infoweb/residential/buying-a-flat/new/executive-condominiums