Buyers of HDB flats can finance their purchase using a combination of the following:

• Savings
• CPF savings
• CPF housing grants
• HDB concessionary housing loan or Bank loan

Cash must be used for the following:

• Option fee (up to $1,000) and deposit (up to $5,000 minus the option fee) to seller
• Part or full amount of the initial payment

• If CPF savings are insufficient or
• Taking a bank loan

• Amount of purchase price not covered by CPF savings and housing loan

• The maximum Loan-to-Value (LTV) ratio for a bank loan is 80%

• Cash proceeds from the disposal of your existing or previous flat

• This applies to borrowers taking a second HDB housing loan

CPF savings

CPF Ordinary Account (OA) savings can be used to finance a flat under the Public Housing Scheme (for HDB housing loans) and Approved Housing Scheme (for bank loans)

The CPF OA savings can be used for:

• All or part of the purchase price
• All or part of the initial payment (option fee and deposit)
• Stamp duty, legal fees and other related costs such as flat upgrading
• Monthly housing loan instalments

There are limits to the amount of CPF savings that can be used depending on:

• Whether you are buying a new or resale HDB flat
• Whether you are taking a HDB concessionary loan or bank loan

The limits that may apply are:

• Valuation Limit (VL) – the lower of the purchase price or market value at the time of purchase
• Withdrawal Limit (WL) – the maximum amount of CPF savings that can be used, capped at 120% of the VL

Buyers of new HDB flats with a HDB concessionary loan can use their CPF OA savings until the loan is fully paid

CPF housing grants

Singapore citizens may be eligible for CPF housing grants that are given in the form of CPF OA savings. The grants can be used for the initial payment and reducing the amount of loan needed

Housing loan

• Depending on eligibility, the Housing & Development Board (HDB) offers housing loans at a concessionary interest rate for the purchase of new or resale HDB flats
• Housing loans are also available from banks

Key differences between HDB and Bank housing loan

Source: HDB, CPF, The Edge Property