HDB sale of balance flats a profitable option

What is Sale of Balance Flats (SBF)?
Under the Sale of Balance Flats Exercise, 2, 3, 4 and 5-room and Executive flats are made available from all housing sectors of Singapore. Sale of Balance flats have become increasingly popular among property buyers in Singapore. In April 2013, close to 20,000 applications were submitted for 3,100 units. This worked out to about 6 applicants per unit.
SBF gaining popularity
Sale of Balance Flats is fast gaining popularity among Singaporean property buyers. SBF flats are located primarily in mature and highly-developed estates and property value is expected to enjoy healthy gains. Comparatively, there is a view by property experts that SBF is more attractive than BTO flats which are often located in low-density or under-developed locations.
Secondly, potential buyers of SBF flats have to wait for shorter periods of time compared to BTO flat buyers because SBF flats are already near their completion date at the time of offer. Other less obvious reasons include the fact that 50% of these units are reserved for married couples with children under the age of 16. First-time couples expecting their first child hold additional advantage in obtaining a SBF flat.
How do I apply for a SBF?
1.Check HDB Eligibility for potential SBF buyers
The Housing Development Board (HDB) of Singapore outline eligibility criteria including the condition that at least one occupant has to be a Singapore citizen and at least 21 years of age or 35 years at the time of application under the Single Singapore Citizen Scheme, Non-Citizen Spouse Scheme and Joint Singles Scheme. Upon application, the buyer can request for priority under the Married Child Priority Scheme, Parenthood Priority Scheme, Studio Apartment Priority Scheme, Third Child Priority Scheme and Tenants Priority Scheme. Buyers can also decide on whether to go for 3-room standard flats located in mature estates, 3-room Premium and 4-room flats, or 5-room and Executive flats.
2. Online Application and seeking financial advice
Upon meeting the eligibility conditions, the buyer can apply for a SBF via e-Sales through the HDB website; but not before securing financing advice on loan quantum from HDB or a financial institution.
3. Maximising chances of getting a home
Upon application completion, HDB will allot the buyer a balloted queue position a few months after processing the buyer’s online application. HDB will inform the buyer of appointment to to select preferred flat.
First-time family units and couples are allocated two chances compared to second-time families who are only given one chance. Furthermore, first-time families who apply under the Married Child Priority Scheme (MCPS) will receive more chances compared to other first-time buyers. For further details: see here.
4.Applying for your mortgage loan : know the different loan schemes available
The next step is to apply for your mortgage loan. Firstly, obtain the HDB Loan Eligibility Letter (HLE) from HDB or a Letter of Offer from a financial institution. Then the buyer signs the Lease Agreement within 4 months from flat selection date. Differing downpayment schemes apply to HDB as compared to a financial institution.
5.Getting the keys to your new home: important financial considerations
Key collection apply differently depending on flat type and be it completed or under construction. For buyers taking a HDB loan for completed flats, key collection takes place at the same time when signing the Lease Agreement. For flats under construction, key collection take place only upon completion. A HDB or bank loan, or CPF or cash can be used to pay the sale balance. Note there are no housing loans available for Studio Apartments – the balance of the sale flat must be paid in full by CPF or cash.