Many second-time home buyers face similar concerns too. Here’s a list of the most common questions we hear from our clients all the time:

How do you sell an existing HDB flat and buy a new one?

Should I sell my HDB flat first or buy first

How long is the process of selling and buying HDB flats

Since selling off an existing flat and purchasing a new one involves a potential buyer, a potential seller and yourself, it is a much more complicated process than when you first bought your first home.

But fear not, we are here to share some useful tips that can help you in this process – specifically this HDB Contra Scheme.

HDB Contra Scheme

The HDB Contra Scheme, otherwise known as the Enhanced Contra Facility, is a useful but little-known scheme to help second-time home buyers.

A joint effort by HDB and the CPF board, it allows sellers to sell their existing HDB flat and concurrently buy another HDB resale flat using the proceeds (as well as the refunded CPF monies).

What does that mean for you (the seller and second-time home buyer)?

It means you will need to pay a much lesser amount of cash upfront for your new HDB flat and get a reduced mortgage loan for the new flat.

Why? Because the proceeds from your old home will be used automatically to pay for the new home including the insurance premiums for the CPF Home Protection Scheme.

However, do note that the CPF refunded monies cannot be used for the payment of fees like stamp duty and conveyancing fees.

How does the HDB Contra Scheme work in real life?

Parties involved:

Group A – Aaron (Potential Buyer): Wants to buy your existing HDB flat

Group B – You (Seller of existing HDB and buyer of new HDB): Wants to buy Cherrie’s HDB flat

Group C –Cherrie (Seller of Cherrie’s HDB): Wants to sell her HDB flat to you

You will apply for HDB Contra Scheme. If approved, your sale proceeds and refunded CPF monies from your sold HDB flat to Aaron, will be channelled to making the purchase of Cherrie’s place.

However, amongst the three groups, only one group is eligible to apply for the scheme at any one time.

If you apply for the Enhanced Contra Facility, Aaron and Cherrie will not be eligible to apply for their own sale and purchases.

Conditions for applying Enhanced Contra Facility

You can apply for the ECF (Enhanced Contra Facility) if you are selling your existing HDB flat and buying an HDB resale flat. However, the buyer of your flat and the seller of your new flat cannot apply for this same scheme.

You cannot be an undischarged bankrupt or have any bankruptcy proceedings against you. HDB may not approve the ECF application if any of the following apply:

There is a mortgage in favour of a financial institution

There is a CPF mortgage/ charge on Flat A and/ or Flat B

Private solicitors must be engaged

ECF is not available for the following types of resale applications:

Conversion Scheme

Sale of part-share of an existing flat

Contra party buys another resale flat using a housing loan from a bank

The resale of Flat A must be completed before or on the same day as the completion of the resale of Flat B

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