You will be able to explain how ECs and private property differ from HDB flats in eligibility, financing and restrictions.
Hakim's colleague bought an executive condo two years ago and talks about it often: the pool, the gym, the price that was well below the condo next door. When Hakim mentioned it at home, Farah asked the obvious question. If an EC is so much cheaper than a condo, what's the catch?
There are a few, and they are the point of this lesson. ECs and private homes sit outside the HDB rules you met in lessons 1.1 and 1.2, but in different ways. One follows many HDB rules while looking like a condo. The other has no HDB rules at all, and stricter rules elsewhere.
An executive condominium is built and sold by a private developer, with condo facilities, but the government sets who can buy it and what owners can do in the first years. That is why it is cheaper than a nearby private condo.
The buyer rules look a lot like HDB's. There are citizenship requirements, a family nucleus requirement and an income ceiling, and first-timers may qualify for a CPF housing grant. Like an HDB flat, an EC has a minimum occupation period. During it you must live in the unit, and you cannot sell it or rent out the whole unit. After it ends, the EC can be sold, at first to a limited group of buyers, and later it becomes fully private and can be sold to anyone, including foreigners. The current eligibility rules, income ceiling and periods are on the HDB website, and they have changed before.
The difference is in the financing. HDB does not lend for ECs, so you need a bank loan. A new EC bought from the developer is still subject to the Mortgage Servicing Ratio, the cap on instalments that also applies to HDB flats, and to the Total Debt Servicing Ratio that applies to all bank property loans. Module 4 explains both, and lesson 4.2, MSR: the cap on instalments for HDB flats and ECs, works out the first.
Private condos and landed homes have no HDB eligibility rules. You don't need a family nucleus, there is no income ceiling, and singles can buy at any age. Permanent residents and foreigners can buy private condos too, although landed homes are restricted for foreigners.
What replaces the HDB rules is cost. Additional Buyer's Stamp Duty can be large if you already own a home or are not a citizen, and lesson 3.2, ABSD: who pays it and when it comes back, sets out who pays it. Bank loans for private property have their own loan-to-value limits and a minimum cash downpayment, covered in lesson 4.1, LTV limits and the cash you must put in. And when you sell within a holding period, Seller's Stamp Duty can apply, which lesson 3.3 covers.
Most private condos are on 99-year leases, like HDB flats. Some are freehold. Either way, monthly maintenance fees are usually much higher than HDB service and conservancy charges, which lesson 7.1, Property tax, fees and upkeep, will add to your yearly cost.
Many couples plan to keep their HDB flat and buy a condo later. HDB restricts this. You cannot buy private property while your flat is still within its minimum occupation period. After that, you may be able to own both, but buying a second home brings ABSD, and selling the flat within a set period to claim it back has its own conditions.
It works the other way too. People who own private property, or sold one recently, may have to wait before they can buy certain HDB flats. Check the current HDB and URA rules before you plan either move. These rules change with cooling measures, and planning from a friend's experience three years ago is how people get caught.
In this example, Farah and Hakim are both Singapore citizens, married, buying their first home, with a household income below the ceilings they checked on the HDB website. That leaves all four doors open, with different strings attached:
HDB BTO or resale: eligible, with possible grants; restriction to note is the MOP and the rule against buying private during it Executive condo: eligible while their income stays under the EC ceiling; restriction to note is the MOP and the need for a bank loan Private condo: eligible, no ABSD on a first home as citizens under the current rules; restriction to note is the minimum cash downpayment and higher monthly fees
They dropped the EC once they saw the launch timeline, which had the same years of waiting as a BTO flat at a higher price. The private condo stayed on the list as a later move. Your list will look different. A permanent resident couple, for example, faces different HDB rules and different stamp duty, and a single buyer under the HDB age limit may find private is the only route open today.
Eligibility is a yes or no for each type, but restrictions are what shape the next ten years. One for each is enough to start with. Module 2 checks HDB eligibility properly with HDB's own process, so treat this as a first pass. In the activity you'll write which of HDB, EC and private you can buy today and one restriction attached to each.
Write which of HDB, EC and private you are eligible to buy today and one restriction that would apply to each.
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