Paper 2 · HDB Policies
CPF Housing Grants & the HDB Resale Process
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. Current (2026) headline amounts:
| Grant | Who it's for | Amount (2026) | 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+) | $14,000 ($21,000 extended family) |
| Singles Grant (resale) | Eligible single citizens, 35+ | $40,000 (2–4 rm) · $25,000 (5 rm+) — half the family grant | $7,000 |
| 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-timers upgrading from a smaller subsidised flat | Up to $15,000 | $7,000 |
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 (they may only qualify for the Step-Up grant).
The resale process
- 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, and it is valid 6 months.
- 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.
Valuation, COV and the 'price-first' rule
Notice the order of the steps above: the parties agree a price, the seller grants the OTP, and only *then* does the buyer submit the Request for Value. That sequence is deliberate. Since HDB revised the resale procedure in March 2014, the price is negotiated first and the valuation is requested after the OTP is granted — the reverse of the old practice, where a valuation was obtained up front and the Cash-Over-Valuation (COV) was haggled over openly. HDB now publishes transacted resale prices rather than COV figures, so a buyer negotiates without knowing what the flat will value at.
Why the valuation still decides the deal. The housing loan and the buyer's CPF are computed on the lower of the resale price or HDB's market valuation — never the higher. Any amount by which the agreed price exceeds the valuation is the COV, and it must be paid in cash: no loan covers it and CPF cannot be used for it.
Put a number on it. A flat is agreed at $630,000 and HDB values it at $600,000 — so the COV is $30,000. An HDB concessionary loan at 75% LTV is worked on the $600,000 valuation, giving $450,000 — *not* 75% of the price. The buyer must fund the remaining $150,000 of the valuation (CPF OA and/or cash) plus the $30,000 COV entirely in cash. Reverse the figures — price $600,000 against a $630,000 valuation — and there is no COV, but the loan is still capped on the $600,000 price: a buyer cannot borrow against the higher valuation.
- COV is cash, always. It sits outside the loan and outside CPF, so a buyer who is fully stretched on CPF has no way to bridge it.
- Grants are unaffected by COV. EHG, the Family Grant and the PHG turn on eligibility and income, not on the valuation — so a grant does not fill a COV gap.
- The buyer commits before he knows the valuation. Because the Request for Value only goes in after the OTP is granted, the salesperson's job is to warn the buyer to keep cash headroom before agreeing a price — a buyer who cannot find the COV cannot complete, and stands to lose his option monies.
HDB OTP vs private OTP
| HDB resale OTP | Private resale OTP | |
|---|---|---|
| Option fee | Negotiable, up to $1,000 | Typically 1% of price |
| Exercise / deposit | Option + exercise fee, total up to $5,000 | Top up to 5% on exercise |
| Option period | 21 days | Commonly 14 days |
| Process | Via HDB Resale Portal + HDB approval | Via lawyers; no HDB approval |
Worked example
A first-timer couple buying a resale flat may qualify for the EHG (scaled to their income) plus a Family Grant and possibly the PHG for living near parents — materially cutting the cash/loan needed. On the OTP: they pay the seller an option fee (say $1–$1,000), then on exercise top up so the option + exercise fee total ≤ $5,000 — nothing like the private 1%/5%.
Second-timers & the resale levy
A second-timer who already enjoyed a housing subsidy (a previous BTO or grant) generally pays a resale levy when taking a second subsidised flat. It claws back part of the first subsidy and is recovered from the first flat's sale proceeds (or paid on the new purchase). Second-timers also receive smaller or no grants than first-timers — and first-timers pay no levy at all.
CPF, accrued interest & financing
CPF Ordinary Account savings can fund the downpayment, purchase price and monthly instalments (subject to limits). But on a future sale, the CPF used plus accrued interest must be refunded to your CPF — so the cash you actually pocket is less than the headline price. Financing is either an HDB concessionary loan (eligibility-based, pegged to CPF OA + 0.1%) or a bank loan (market rate, subject to MSR/TDSR).
Common mistakes
- Applying the private 1%/5% deposit logic to an HDB resale OTP.
- Assuming second-timers get the same grants as first-timers (they get less).
- Overlooking income ceilings on grant eligibility.
- Forgetting HDB resale needs HDB approval to complete.
The trap
Assuming the HDB OTP works like a private OTP. It doesn't — HDB caps the option fee (up to $1,000) and total deposit (up to $5,000), runs a 21-day option period, and needs HDB approval — none of the private 1%/5% mechanics.
Exam takeaway
Match the process to the property: HDB resale = portal + HDB OTP (≤$1k option, ≤$5k total, 21 days, HDB approval); private resale = 1%/5% OTP via lawyers. And grants (EHG/Family/PHG) favour first-timers. Remember the order — price first, valuation after the OTP — so any COV (price above valuation) is cash only, because the loan and CPF run on the lower of price or valuation.
Apply it · the IRAC method
A young couple, both first-time buyers with a modest combined household income, are buying a resale HDB flat and ask what CPF housing grants they may qualify for and how long the resale purchase will take from Option to completion.
- IIssue: What CPF housing grant may the couple be eligible for as first-timer resale buyers, and what is the broad HDB resale process and timeline?
- RRule: First-timer families buying a resale flat may qualify for CPF housing grants such as the Enhanced CPF Housing Grant (EHG), subject to eligibility conditions including a household income ceiling and other criteria; grant amounts are tiered by income. The HDB resale process runs from granting the Option to Purchase (OTP), exercising the OTP, submitting the resale application to HDB, HDB's approval, to completion. Confirm current grant amounts, income ceilings and processing timelines with CPF Board / HDB.
- AApplication: As first-time buyers with a modest income, the couple may be eligible for the EHG, with the exact amount depending on their assessed household income and other conditions. Their transaction will follow the standard OTP → exercise → resale application → HDB approval → completion sequence, which HDB indicates takes a number of weeks once a complete application is submitted.
- CConclusion: Advise the couple that they likely fall within EHG eligibility but should confirm the exact grant amount, income ceiling and current processing timeline directly with HDB / CPF Board, and plan their finances around the full resale timeline to completion.
Worked case study · Section B style
An eligible first-timer couple buy a resale flat with a CPF Housing Grant and use CPF savings for part of the price. • First-timers • Using CPF + a grant
- (i) Eligible first-timers can receive CPF housing grants towards a resale flat
- (ii) Grants are subject to income ceilings and other conditions
- (iii) On a future sale, the CPF used (plus accrued interest) must be refunded to CPF
- (iv) The grant is paid out in cash for the couple to spend freely
- A.(iii) only
- B.(i), (ii) and (iii) only
- C.(i) and (iv) only
- D.All of the above
Show answer & explanation
Answer: B. (i)–(iii) are correct: income-tested grants, and CPF must be refunded with accrued interest on a sale. (iv) is the trap — the grant goes into the purchase, not free cash.
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Practise exam-style questions on HDB Policies — with instant answers and explanations.
Practise HDB Policies questions →Common questions
- Who qualifies for CPF housing grants?
- Eligibility depends on factors such as first-timer status, citizenship and household income ceilings. First-timers generally receive more than second-timers, and amounts are revised by the government from time to time.
- 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 6 months, 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?
- Generally yes. A buyer who previously enjoyed a housing subsidy pays a resale levy when buying a second subsidised flat, and receives smaller or no grants. First-timers do not pay a resale levy.
- 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. Confirm the current procedure with HDB.
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