An executive condominium (EC) makes a great property choice that bridge the gap between public housing and private condominium. ECs provide similar facilities that private condominiums offer – guarded security, swimming pools, clubhouses, playgrounds and other recreational facilities.
Although ECs are typically located away from the city centre and MRT stations, they remain a good buy for many Singaporean families. For those who are wondering if they should buy an EC, there are some important factors to take into consideration, especially with regards to loan financing.
1. Eligibility
Since ECs are still considered a semi-public housing, you’d still need to fulfil eligibility criteria as specified by the HDB. This includes age, citizenship, property ownership status as well as family nucleus criteria.
You can refer here for the detailed requirements.
2. Income requirements
The income ceiling for those who wants to buy an EC is $14,000 for household income. First-time buyers will be eligible for the CPF housing grant of up to $30,000 depending on your household income.
| Average gross monthly household income of all persons in application, i.e. applicants and occupiers | Family Grant | Half-Housing Grant
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 |
|
| Singapore Citizen (SC/ SC) Household | SC/ Singapore Permanent Resident (SC/ SPR) Household | ||
| $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 |
Source: http://www.hdb.gov.sg/cs/infoweb/residential/buying-a-flat/new/schemes-and-grants/cpf-housing-grants-for-ecs
3. Loan Financing
While they are semi-private properties, you will not be eligible for HDB concessionaryloans. This has a few implications:
- You’d need to pay 20% downpayment instead of 10% using a HDB loan for a HDB flat. 5% will have to be in cash, whereas the rest of the 15% can be either in cash or from your CPF money.
- On top of the TDSR, you are subject to the Mortgage Servicing Ratio(MSR) as well – MSR is capped at 30% of all borrowers’ gross monthly income to service all mortgage repayments. You can use our calculator here to help you calculate your MSR.
- Two types of payment schemes – Deferred Payment Scheme and Normal Payment Scheme.
This scheme allows owners to start only paying their loans when the EC is granted TOP. They can be useful for those who have the cash/CPF to put down the 20% down payment, but need some time to be able to meet other financing requirements like the TDSR/MSR or 80% eligibility for a home loan. However, buyers will likely need to pay a higher premium price for the property because developers are not collecting repayments from you while they build the EC.
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