Paper 2 · HDB Transactions: Sale & Rental · 19 min read
CPF Housing Grants & the HDB Resale Process
Practise these sections, in sets of about 30:
Must-know for the exam
- On sale the loan is repaid first, then CPF used plus accrued interest; at market value a shortfall needs no cash top-up, below market value it does.
- The Enhanced CPF Housing Grant (EHG) gives first-timer families up to $120,000 (2026, raised at NDR 2024) for BTO or resale, with a $9,000/mth income ceiling.
- First-timer families buying resale also get the CPF Housing (Family) Grant of $80,000 (2–4 room) or $50,000 (5-room+), ceiling $16,000 from 24 Aug 2026; grants stack to $230,000 with EHG and PHG.
- The Proximity Housing Grant (PHG) pays $20,000 for living within 4 km of parents or children and $30,000 for living together (singles half), with no income ceiling.
- Second-timers get no EHG or Family Grant but may take the PHG and, moving from a 2-room or rental flat, the $15,000 Step-Up Grant; a resale purchase never attracts a resale levy.
- From 9 May 2023 the HFE letter (valid 9 months since 7 Nov 2023) replaced the Intent to Buy; buyers must hold a valid one when the seller grants the OTP.
- A seller who has committed to a completed Singapore property may stay up to 3 months after completion if buyers agree; the buyers' MOP starts when the stay ends.
- Since March 2014 the price is agreed before the valuation; loan and CPF run on the lower of the two, so COV (price above valuation) is cash only, never CPF.
- New flat with an HDB loan: 10% at the Agreement for Lease and 15% at keys (staggered: 5% + 20%); cancelling after the Agreement forfeits 5%.
- An HDB resale OTP caps the option fee at $1,000 and option plus exercise fee at $5,000, runs 21 days and needs HDB approval, unlike the private 1%/5% OTP.
On this page · 12 sections
Two practical topics close out the HDB rulebook: the grants that make a flat affordable, and the resale process — which runs very differently from a private sale.
CPF housing grants
Eligible buyers — especially first-timers — can receive CPF housing grants to offset the purchase price, subject to income ceilings and citizenship. First-timers receive far more than second-timers. The headline amounts for a resale flat:
| Grant | Who it's for | Amount | Income ceiling |
|---|---|---|---|
| Enhanced CPF Housing Grant (EHG) | First-timer families — BTO or resale | Up to $120,000, scaled to income (max at ≤ $1,500/mth) | $9,000/mth |
| EHG (Singles) | First-timer singles, 35+ | Up to $60,000 | $4,500/mth |
| CPF Housing (Family) Grant | First-timer families buying resale | $80,000 (2–4 rm) · $50,000 (5 rm+) | $16,000 ($24,000 extended family), from 24 Aug 2026 |
| Singles Grant (resale) | Eligible single citizens, 35+ | $40,000 (2–4 rm) · $25,000 (5 rm+) — half the family grant | $8,000 (from 24 Aug 2026) |
| Proximity Housing Grant (PHG) | Living near / with parents or children | $20,000 within 4 km · $30,000 living together (singles: half) | None |
| Step-Up Housing Grant | Second-timer families moving from a 2-room flat to a 3-room flat, or from public rental to a 2-room or 3-room flat, new or resale; each flat bought must be Standard or, if unclassified, in a non-mature estate | $15,000 | $8,000 (its own ceiling, hdb.gov.sg, read 1 Oct 2026) |
Grants stack. A first-timer SC + SC couple buying a resale flat near their parents can combine EHG ($120k) + Family Grant ($80k) + PHG ($30k) = up to $230,000 off the price. A first-timer + second-timer couple has the EHG and Family Grant halved. Two second-timers get neither, but they are not shut out: the PHG goes to any household that has not taken a PHG before, whatever subsidy it had earlier, and the Step-Up Grant ($15,000) helps a second-timer family moving from a 2-room flat to a 3-room flat, or from public rental to a 2-room or 3-room flat (each flat bought Standard or, if unclassified, in a non-mature estate), income up to $8,000 (hdb.gov.sg, PHG and Step-Up pages, read 1 Oct 2026).
▸ More checkpoints: the EHG income taper and the two ceilings
The $120,000 headline is the grant at the bottom of the income scale, not the typical award. The EHG steps down through $500 income bands, from $120,000 at $1,500/mth or less to $5,000 at the top of the range — so a first-timer near the $9,000 ceiling qualifies, but for a fraction of the maximum.
| Average monthly household income | EHG (families) |
|---|---|
| $1,500 or less | $120,000 — the maximum |
| $8,001 – $8,500 | $10,000 |
| $8,501 – $9,000 | $5,000 — the lowest tier |
| Above $9,000 | Nil — over the EHG ceiling |
Worked checkpoint. A first-timer married couple, both Singapore Citizens, household income $8,800/mth, buy a 4-room resale flat 3 km from the wife's parents. Family Grant (2- to 4-room): $80,000. EHG: $8,800 falls in the $8,501–$9,000 band — eligible, but only $5,000. PHG: within 4 km, not living together — $20,000. Stacked total: $105,000. Assume the headline EHG instead and you overstate the grants by $115,000.
- Two ceilings, one household. A family earning $12,000/mth is under the $16,000 ceiling (from 24 Aug 2026) for a new flat and for the Family Grant on resale, but over the $9,000 EHG ceiling — so they can buy, and take the Family Grant, but receive no EHG. The $16,000 ceiling does not carry across to the EHG.
- Place the income before you add. Every grant question that gives a household income is really asking which EHG band it sits in. Find the band first, then stack the Family Grant and PHG on top.
The trap
Applying the $120,000 EHG at every income. It is the figure for households earning $1,500/mth or less; at the $9,000 ceiling the EHG is $5,000. Examiners set the income near the ceiling precisely to catch candidates who add the headline.
The resale process
HDB resale: the clocks from HFE letter to completion
Timeline of an HDB resale. The buyer gets an HFE letter, valid 9 months. The seller registers an Intent to Sell, valid 12 months, at least 7 days before granting an OTP. The seller grants the OTP for an option fee of 1 to 1,000 dollars. The buyer submits a Request for Value by the next working day if using CPF or a loan. The buyer exercises within 21 calendar days; option and exercise fees total at most 5,000 dollars. Both parties submit the resale application and HDB accepts a complete one within 28 working days. Completion is about 8 weeks after HDB accepts the application.
Before house-hunting
HFE letter
Who: Buyer
Confirms eligibility, grants and HDB loan. Valid 9 months from issue (6 months before 7 Nov 2023).
At least 7 days before the OTP
Intent to Sell
Who: Seller
Registered on the HDB Flat Portal; valid 12 months.
Day 0
OTP granted
Who: Seller
Buyer must already hold a valid HFE letter. Option fee $1 to $1,000.
By the next working day
Request for Value
Who: Buyer
Only if paying with CPF or a housing loan. The price is already agreed; any amount above the value is cash.
Within 21 calendar days
Exercise the OTP
Who: Buyer
Expires at 4pm on day 21. Option + exercise fee ≤ $5,000 in total. A bank-loan buyer needs a Letter of Offer by now.
After exercise
Resale application
Who: Buyer and seller
Each submits their portion. HDB accepts a complete application within 28 working days.
About 8 weeks after HDB accepts
Completion
Who: HDB with both parties
The earliest date; buyer and seller may agree in writing to defer it.
Source: HDB, Overview of Resale Flat Buying Process (updated 24 Jul 2026), Option to Purchase and Intent to Sell pages; HDB news, HFE letter validity extended from 6 to 9 months from 7 Nov 2023. Checked 1 Oct 2026.
- The buyer first obtains a valid HDB Flat Eligibility (HFE) letter on the HDB Flat Portal — confirming eligibility, the grants they qualify for and loan options before committing. From 9 May 2023 it replaced the old "Intent to Buy" registration. It is valid 9 months from the date of issue — HDB extended it from 6 to 9 months with effect from 7 Nov 2023 (hdb.gov.sg).
- The seller registers an Intent to Sell on the portal — valid 12 months, and it must have been registered at least 7 days before the seller may grant an OTP.
- Seller grants an HDB OTP (the buyer must hold a valid HFE letter at that point); the buyer submits a Request for Value to HDB by the next working day after the OTP is granted, which anchors the valuation.
- Buyer exercises within the 21-day Option Period, then both submit the resale application; HDB approves and completion follows about 8 weeks from HDB's acceptance of the application.
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Quick self-check · 5 questions
Can you answer these without scrolling up?
Say your answer out loud, then tap to check it.
First-timer SC couple, income $8,800 a month, buy a 4-room resale flat 3 km from parents. What grants can they stack?Show answer
$105,000. Family Grant $80,000 + EHG $5,000 (the $8,501–$9,000 band) + PHG $20,000 (within 4 km, not living together). Assuming the $120,000 headline EHG would overstate the total by $115,000.
A resale flat is agreed at $630,000 and valued at $600,000. What is the COV and how is the 75% HDB loan worked out?Show answer
COV is $30,000, payable in cash only. The loan runs on the lower figure: 75% × $600,000 = $450,000. CPF and loans never cover COV.
What are the HDB resale OTP option fee, total deposit and option period?Show answer
Option fee up to $1,000; option plus exercise fee up to $5,000; 21-day option period. It runs through the HDB portal and needs HDB approval, unlike the private 1%/5% OTP.
A second-timer couple buys a resale flat. Do they pay a resale levy?Show answer
No. The levy applies only when a household that took a subsidy buys a new flat from HDB or a new EC from a developer. Resale or private purchases attract none.
How long must a seller's Intent to Sell be registered before granting an OTP, and how long is it valid?Show answer
At least 7 days before the OTP is granted; it is valid 12 months. The buyer must hold a valid HFE letter when the OTP is granted.
Common questions
- Who qualifies for CPF housing grants?
- First-timer families buying resale may take the EHG (up to $120,000, income up to $9,000 a month) and the Family Grant ($80,000 for 2- to 4-room, $50,000 for 5-room or larger, income up to $16,000 from 24 Aug 2026). Any household that has not taken a PHG before may take the PHG on a resale flat near or with parents or children, with no income ceiling. Second-timer families moving from a 2-room flat to a 3-room flat, or from public rental to a 2-room or 3-room flat (each flat bought Standard or, if unclassified, in a non-mature estate), with income up to $8,000 a month, may take the $15,000 Step-Up Grant (hdb.gov.sg, read 1 Oct 2026).
- Is the HDB option to purchase the same as a private OTP?
- No. HDB resale uses its own option-to-purchase form and process through the HDB Resale Portal, with different option fee and timing rules from a private property OTP.
- What is the HDB Flat Eligibility (HFE) letter?
- From 9 May 2023 the HFE letter replaced the old "Intent to Buy" registration for flat buyers. It confirms your eligibility to buy, the housing grants you qualify for and your loan options upfront, is valid for 9 months from issue (extended from 6 months on 7 Nov 2023), and must be valid when the seller grants you the OTP. Note the mirror-image step on the other side: the seller registers an Intent to Sell (valid 12 months), which must have been registered at least 7 days before they may grant an OTP.
- Do second-timer buyers pay a resale levy?
- Only when the second purchase is itself subsidised: a new flat from HDB or a new EC from a developer. A second-timer buying a resale flat or private property pays no levy. Where it applies, the levy is a fixed sum set by the first flat's type (for example $40,000 for a 4-room flat sold on or after 3 March 2006, half that on a singles basis), paid in cash or from sale proceeds, never from a housing loan (hdb.gov.sg, read 1 Oct 2026). First-timers pay none.
- What is COV (Cash Over Valuation) and how is it paid?
- COV is the amount by which the agreed resale price exceeds HDB's market valuation of the flat. It must be paid in cash — no housing loan covers it and CPF cannot be used for it — because the loan and CPF are computed on the lower of the resale price or the valuation, never the higher. Since HDB revised the resale procedure in March 2014 the price is agreed first and the Request for Value is only submitted after the OTP is granted, so a buyer commits to a price before knowing the valuation and should keep cash headroom. Housing grants do not help: they turn on eligibility and income, not on the valuation. (hdb.gov.sg, read 1 Oct 2026).
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