Homies, I must let you in on a little secret. It’s surprising that most HDB Homeowners are unfamiliar with this collaboration between CPF and HDB… It helps you save time and money and move into your next home immediately should you need to.
This program is called the HDB Enhanced Contra Facility (ECF).
Ultimately, if you qualify for this program, you’ll be completing both the sale and purchase of a HDB at the same time (within the day). You’ll pass your keys to your buyer and collect keys from the owner of your next home on the same day. Marvelous really.
In addition, by using the ECF, you’ll:
1) Pay a lower cash outlay,
2) reduce the amount of loan required, and
3) save a lot of time, potentially multiple weeks, or even months.
Now as we know, most good things have some kind of “catch” to it, so here’s what you need to qualify.
#1: Only 1 Party May Apply
When you’re selling and buying a HDB flat, there are 2 properties involved, but 3 parties.
- The buyer of your home
- You, the seller of your own home
- The seller of the home you’re buying
Between these 3 parties, only 1 may apply for the ECF. And no, you don’t draw lots to decide who gets to use the facility, it is negotiated and decided between the parties.
What usually happens is that you have to decide whether or not you want or need to use the ECF first.
If you do, you’ll have to notify the buyer of your property that they can’t apply for the ECF if they’re intending to buy your property, and when searching for your next home, you’ll have to avoid listings that specifically state that the seller is planning to apply for the ECF.
Now you may realise that it’s not all too rosy. If you’re applying for the ECF, your buyer and seller pool shrinks. Fewer people can buy your place and fewer properties are available for you to purchase.
#2: HDB Loans & Conveyancing Lawyers
If there’s a loan involved in either the property you’re selling or purchasing, it has to be a HDB Loan. And as you know, you are only allowed to take the HDB Loan twice in your life.
So, if you’ve already taken it twice and you’re in need of a loan, you’ll have to use a bank loan, and thus, no ECF for you.
To add, if there are no loans involved, there’s no issue.
Similarly, both the sale and subsequent purchase has to be represented by a HDB conveyancing lawyer. We covered why you need legal conveyancing for your HDB flat here.
#3: Managing a tight timeline
It may be obvious that since you’re planning to sell and buy a HDB and complete the entire transaction on the same day, it would mean that you’ll be dealing with a tight timeline.
To provide context, the two applications for selling and buying must be submitted together. This means while you’re looking for a buyer for your home, you must find a home in the same period.
Complications can definitely arise.
Right at the start, you may only feel confident to send in an offer for your next house only after you receive an offer for your current place. This means that you’ll have to wait for an offer before putting in an offer yourself.
Even if you found the most perfect place at an amazing price, you may need to give it up…
Similarly, if you received a great offer for your place but you’re still undecided on the purchase, you may need to reject the great offer or settle for a next house that’s less than ideal.
Managing this yourself is definitely a tough ask
Therefore, we recommend working with an Ohmyhome agent.
Come on, we do this every day. With over 70 transactions per month, our agents are more than familiar with the HDB Enhanced Contra Facility process.
Applying for the ECF has its flaws, but it’s more than worth it especially when you can save plenty of time and money. Any time wasted may mean having to rent for a few months if you sold too quickly before buying or feeling desperate to sell at a cut price when you bought another place too fast.
Lastly, when you work with Ohmyhome, we even cost less. At only 1% commission fees, we’re a 50% discount from the general market.
Pay less for more. It does sound good, doesn’t it?
If you’re subconsciously nodding your head right now, do yourself a favour and click this link to book a callback with our agent.
Alternatively, you can Whatsapp us by or start a chat on our website in the bottom corner of your screen.