Guide to Using CPF for Private Residential Properties

By Lin Zhiqin

/ The Edge Property |

June 10, 2016 12:00 PM SGT

Under the Central Provident Fund Board’s Private Properties Scheme (PPS), you can use your savings in CPF Ordinary Account (OA) to buy or build private residential property for occupation or investment.

It can be used for the following:

Pay purchase price of the property

Repay housing loan in part or whole and to service monthly housing loan instalments

Repay construction loan in part or whole and to service the monthly loan instalments taken to buy land and/or to construct a house on that land

Pay stamp duty, legal costs, survey fees and other related costs incurred in the property purchase, refinancing and/or construction of the house

Eligibility

All CPF members who are eligible to buy a private property are eligible under PPS with the following exceptions.

You are buying a property with remaining lease of less than 30 years

You are buying a property with a remaining lease of between 30 and 60 years and your age plus the remaining lease of the property is less than 80 years

You are a single person buying a private property with a non-related single and you have used CPF for an existing property

You are a married person buying a property with a non-related single

How much CPF can you use?

There are limits on the amount of CPF savings you can use to buy a private residential property

Valuation Limit (VL) is the purchase price or the value of the private property at the time of purchase, whichever is lower.

Withdrawal Limit (WL) is 120% of the VL. This is the maximum amount of CPF you can use for the private property.

To use your CPF beyond VL and up to WL, you need to meet the following requirements:

Below 55 years old: To set aside the current Basic Retirement Sum (BRS) in your Special Account (SA), including the amount withdrawn for investment and OA

55 years and above: To meet the BRS in your Retirement Account (RA), SA (including the amount withdrawn for investment) and OA

	Basic Retirement Sum
Age 55 in 2016	$80,500
Age 55 in 2017	$83,000
Age 55 in 2018	$85,500
Age 55 in 2019	$88,000
Age 55 in 2020	$90,500

The amount of CPF you can use is lower if you are buying a private property with a remaining lease of between 30 and 60 years.

If you are buying a property with a remaining lease of between 30 and 60 years, your age plus the remaining lease of the property must be at least 80 years

The maximum amount of CPF is a percentage of the Valuation Limit computed as:

(Remaining lease of property when youngest eligible owner using CPF is 55 years old) / (Lease of the property at point of purchase) x (Lower of purchase price or value of the property)

Using CPF for downpayment

Downpayment for your private residential property can be paid using a mix of cash and CPF, with conditions dependent on number of existing housing loans, loan tenure and borrower age.

Buyers who currently own only one residential property, with the intention of selling it, and are applying for a second housing loan for the purchase of another property which is an Executive Condominium (EC) purchased directly from a developer or a HDB flat can be treated as individuals with no outstanding housing loans. Such buyers will have to provide the bank a copy of the signed undertaking to HDB committing to complete the sale of the sole existing property within the period stipulated in the undertaking.

Type of housing loan	Downpayment	Source of funding
Loan tenure does not exceed 30 years; and Sum of loan tenure and age of borrower at the time of applying for the loan is below 65 years	20% of purchase price or market valuation, whichever is lower	First 5% in cash Next 15% in cash and/or CPF
Loan tenure exceeds 30 years (up to a maximum of 35 years); or Sum of loan tenure and age of borrower at the time of applying for the loan is above 65 years	40% of purchase price or market valuation, whichever is lower	First 10% in cash Next 30% in cash and/or CPF
Buyer applying for a loan with 1 other outstanding housing loan Loan tenure does not exceed 30 years; and Sum of loan tenure and age of borrower at the time of applying for the loan is below 65 years	50% of purchase price or market valuation, whichever is lower	First 25% in cash Next 25% in cash and/or CPF
Buyer applying for a loan with 1 other outstanding housing loan Loan tenure exceeds 30 years (up to a maximum of 35 years); or Sum of loan tenure and age of borrower at the time of applying for the loan is above 65 years	70% of purchase price or market valuation, whichever is lower	First 25% in cash Next 45% in cash and/or CPF
Buyer applying for a loan with 2 or more other outstanding housing loans Loan tenure does not exceed 30 years; and Sum of loan tenure and age of borrower at the time of applying for the loan is below 65 years	60% of purchase price or market valuation, whichever is lower	First 25% in cash Next 35% in cash and/or CPF
Buyer applying for a loan with 2 or more other outstanding housing loans Loan tenure exceeds 30 years (up to a maximum of 35 years); or Sum of loan tenure and age of borrower at the time of applying for the loan is above 65 years	80% of purchase price or market valuation, whichever is lower	First 25% in cash Next 55% in cash and/or CPF

How to apply to use CPF?

1. Authorise your lawyer to submit

An application form to use your CPF savings to buy the property

A valuation report by a licensed valuer

1. You will receive a Letter of Approval

2. Instruct your lawyer to work with the CPF Board to complete the legal documentation

Your CPF savings will be released to buy the property after you have:

Submitted all the required documents

Paid the required cash downpayment

Paid any balance purchase price after taking into consideration the CPF lumpsum and housing loan amount

Source: CPF, www.moneysense.gov.sg, iCompareLoan.com, The Edge Property

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