Sunday, October 14, 2012

CPF Not Enough for HDB Downpayment?

My girlfriend and I are eligible for the HDB staggered downpayment scheme where we pay the 10% downpayment as follows:

  • 5% of the purchase price at the time of signing of the Agreement for Lease 
  • Balance 5% at the time of keys collection which will be in 2016.

Signing of the Agreement for Lease is supposed to happen this month(October 2012) and our CPF savings are still insufficient to pay for the first 5% downpayment. HDB requires us to pay the balance in cash, which amounts to about $4000. A way to circumvent this problem is to delay the signing of the Agreement For Lease. By delaying the signing of the Agreement For Lease, our CPF will accumulate more money and this reduces the cash balance we have to pay. I am still a full time student and my girlfriend is the only person contributing to CPF. Given that her monthly salary is $2,400, contribution to the CPF Ordinary Account is approximately $550 every month. This means that for every month we delay, we will be able to reduce our cash payment by $550. To not pay single cent in cash for the downpayment, we will have to delay the signing of the Agreement for Lease by about 7 to 8 months.

So how to delay the signing of the Agreement for Lease?

As HDB will invite us to sign the agreement for lease only after our Additional Housing Grant(AHG) and HDB Loan Eligibility(HLE) are being approved, I decided to delay the application process of AHG and HLE by:

1)  Exceeding the submission deadline for the required documents
2)  Submitting an incomplete set of documents

This resulted in HDB sending us another letter requesting for the missing documents with a new submission deadline. Once again, I exceeded the new deadline and submitted an incomplete set of documents which resulted in HDB sending us another letter with a new deadline. This went on and on until HDB sent us a letter stating "If we do not receive the documents by the due date, we take it that you are no longer interested in applying for the HDB Loan Eligibility Letter." It is only after this letter that I finally gave in and sent them everything they needed before the deadline. By doing this, I managed to delay the whole application process by about 2-3 months.

Now, my HLE is approved and AHG is still pending for approval. However, I still need to delay the signing of agreement for lease by another 4-5 months in order to not pay a single cent in cash. This is when I called up my HDB officer and our conversation is as follows:

Me: Hi officer, my name is XXXXX and my reference number is XXXXX. I am calling to enquire about the status of my AHG application

HDB Officer: Oh it should be approved in a month's time. Just wait for the letter to be sent to you.

Me: May I know when is the signing of Agreement for Lease?

HDB Officer: It will be within a month after your AHG is approved.

Me: Oh, actually there is a slight problem here. My girlfriend is currently overseas on a work assignment and will only be back next year February. May I know if both parties have to be present for the signing of Agreement for Lease?

HDB Officer: Yes of course! (sounding slightly irritated) Did your girlfriend sign any documents to appoint an attorney to act on her behalf?

Me: No. What's that?

HDB Officer: Ok never mind. Just call me again to reschedule the date when u receive the invitation to sign the Agreement for Lease.

By the end of the conversation, I could sense that the HDB officer was rather pissed off. Anyway, it was still quite helpful of her to allow us to postpone the signing of Agreement for Lease.

As my girlfriend will be receiving her bonus in December 2012 and January 2013, our CPF savings should have accumulated enough to pay the full 5% downpayment by February 2013.