My CPF - Buying A House

...A Place To Call Your Own

Home ownership is about security, comfort, and fulfilling one's dream of having a place to call your own. The sense of community that comes with putting down roots in a place of your own, the security of having a roof over your head, the opportunity for financial growth -- all these come about because of one's decision to become a homeowner.

Buying a home may also be the single largest investment many Singaporeans will ever make in their lives. Hence, before you decide on buying that dream home, you need to consider the issues below and plan your finances carefully. (Read "CPF Property Rules: 4 things you may not know").

Remember these two key points before you commit to your dream home!

	The more money you spend on housing, the less you will have for retirement. Generally, your total monthly debt payments (including your home loan) should not be more than 35% of gross monthly income.
	You should be aware that there are withdrawal limits on the use of CPF for housing. Once you reach the limits, you may have to pay the housing instalments fully in cash.

What is your current financial situation?

Take an objective look at your monthly income and expenses, and decide how much you can really afford to put aside. You should also check out the current balances in your bank account(s) and your CPF Account to see if you have sufficient funds.

Click here to go to My Statement to check your CPF Account balance.

You also need to review your other financial commitments like car loan, education loan, and insurance premiums which require deductions from your CPF Account or your bank account. There are also other miscellaneous items to consider as well, e.g. property tax, protection for your home in the event of unforeseen circumstances, maintenance, etc.

If buying a home causes you to fall behind on other financial obligations, you may want to consider postponing the decision on homeownership.

Visit the CPF Housing Site that may assist you in making an informed decision.

Should you buy an HDB flat or a private property?

It all depends on your needs and how much you can afford. You wouldn’t want to spend your entire life working to pay off your home. Hence, you should only buy a property that is within your means.

You may wish to try the CPF Home Affordability Calculator to find out your housing affordability.

What are the criteria required to be able to use CPF savings to buy a home?

a)	For HDB flat
b)	For Private Property

a)	For HDB flat

If you are the registered owner or co-owner of an HDB flat, you can withdraw all of your CPF savings in the Ordinary Account and the monthly CPF contributions that are paid into your Ordinary Account for the purchase of the HDB flat and/or payment towards your HDB housing loan / bank loan subject to the prescribed limit.

b)	For Private Property

As long as you are not an undischarged bankrupt, you can withdraw all your CPF savings in the Ordinary Account and the monthly CPF contributions that are paid into your Ordinary Account for the purchase of the property and/or payment towards your housing loan subject to the prescribed limit.

What can CPF savings be used for:

a)	When buying an HDB flat
b)	When buying a private property

a)	When buying an HDB flat

	You can use your CPF savings in your Ordinary Account:
	i)	To make lump sum payment to the Housing & Development Board directly for the purchase of a HDB flat; or
	ii)	To redeem the whole or part of the housing loan and/or to pay the monthly installments for the housing loan which is taken for the purchase of the HDB flat; or
	iii)	To pay legal fees, stamp duty, transfer fees and other related costs incurred in connection with the purchase and/or mortgage/redemption of the flat.

b)	When buying a private property

	You can use your CPF savings in your Ordinary Account:
	i)	To make direct payment to a property developer or a seller for the purchase of a property;
	ii)	To repay a housing loan taken for the purchase of the property. However, please take note of the following:
		The mortgagee's restriction on the use of your CPF savings towards servicing your housing loan.
		The reduction of the contribution to the Ordinary Account as you get older.
		The reduction of the contribution to the Ordinary Account owing to increase in Medisave ceiling. For more information on CPF Contribution Rates Table, click here.
		An amount should also be set aside in your Ordinary Account to buffer against unexpected events such as job retrenchment, or temporary work stoppage for childcare reasons.
		Installment payments for other properties, if any.

	iii)	To repay a housing loan taken for the purchase of land and/or for construction of a house on that land; and

	iv)	To pay the legal costs, stamp duty and survey fees incurred in connection with the purchase, refinancing and/or construction of the house.

How much of CPF can you use for:

a)	A new flat bought directly from HDB
b)	A resale flat bought in the open market
c)	Private property

A new flat bought directly from HDB

If you are taking the HDB housing loan for your new flat bought directly from HDB, you can use up to 100% of your CPF Ordinary Account savings to pay the initial 10% deposit as well as the balance of the purchase price.

If your existing CPF balance is not enough for full payment of the purchase price, you may take up a housing loan from HDB subject to credit assessment by HDB, and use all the monthly contributions to your Ordinary Account for the instalment payment of the loan.

Also, HDB requires you to exhaust all your CPF Ordinary Account savings first before granting you any housing loan.

If you are taking a bank loan to finance the purchase of your new flat bought directly from HDB, you can use your Ordinary Account savings, and the future monthly CPF contributions in your Ordinary Account to buy the flat and/or to pay the monthly instalments of the housing loan up to 100% of the Valuation Limit (VL). The VL is the lower of the purchase price or the value of the property at the time of purchase.

Effective Date ²	Housing Withdrawal Limit
1 Jan 2003 - 31 Dec 2003	150% of VL
1 Jan 2004 - 31 Dec 2004	144% of VL
1 Jan 2005 - 31 Dec 2005	138% of VL
1 Jan 2006 - 31 Dec 2006	132% of VL
1 Jan 2007 - 31 Dec 2007	126% of VL
1 Jan 2008 onwards	120% of VL

¹ FOR MEMBERS BELOW 55 YEARS OLD
The AHWL is the available Ordinary Account balance after setting aside the prevailing Minimum Sum cash component. Savings in the Special Account (including the amount used for investment) and Ordinary Account can be used to meet the prevailing Minimum Sum cash component.

FOR MEMBERS 55 YEARS OLD AND ABOVE
The AHWL is the available Ordinary Account balance less the shortfall in member’s Minimum Sum cash component.

² For new flats, it refers to the date of booking.

The following example shows how the additional CPF amount is computed when the 100% Valuation Limit is reached. The computation is based on 132% Valuation Limit and a Minimum Sum of $90,000 (of which the cash component is $45,000.)

(A)	Valuation Limit (lower of the purchase price or the value of the property at the time of purchase)	= $150,000
(B)	CPF Withdrawal Limit (132% of VL)	= $198,000
(C)	Amount of CPF Used	= $150,000
Additional CPF Allowed = Lower of Balance CPF Withdrawal Limit or AHWL
(D)	Balance CPF Withdrawal Limit = (B) – (C)	=$198,000 - $150,000 = $48,000
AHWL Is Computed As:
(E)	Net Balance in Ordinary Account	= $30,000
(F)	Net Balance in Special Account	= $10,000
(G)	Amount Used under CPFIS–SA	= $30,000
(H)	Total = (E) + (F) + (G)	= $70,000
(I)	Prevailing Minimum Sum Cash Component	= $45,000
(J)	AHWL = (H) – (I) or (E) ie.net balance in Ordinary Account, whichever is lower	$25,000

The additional CPF that can be used to pay the housing loan is $25,000 [(lower of Balance Withdrawal Limit (D) or AHWL (J)].

With effect from 1 Jan 2004, new buyers who are taking a bank loan will have to pay Y% down payment by cash. The balance of the down payment (10% - Y) can be paid using CPF. The table below shows the schedule of Y over the years:

Effective Date ³	Cash Downpayment
1 Jan 2004 - 31 Dec 2004	2%
1 Jan 2005 - 31 Dec 2005	4%
1 Jan 2006 onwards	5%

Do bear in mind that the monthly service, conservancy and other charges relating to the use of the property, including taxes, cannot be paid with your CPF savings. You will have to pay for these using cash.

³ For new flats, it refers to the date of booking.

A resale flat bought in the open market

If you are taking up a HDB loan:

You may use all your CPF savings in your Ordinary Account towards the purchase and to service the housing loan taken from HDB up to the Valuation Limit (VL) of the flat. The VL is the lower of the purchase price or the value of the property at the time of purchase.

HDB may grant you a loan of up to 90% of the VL. The HDB loan is subject to credit assessment by HDB. Also, HDB requires you to exhaust all your CPF Ordinary Account savings first.

	Example A	Example B
Purchase price of flat	$ 110,000	$ 110,000
Value of flat	$ 100,000	$ 100,000
Therefore, Valuation Limit is	$ 100,000 (a)	$ 100,000 (a)
Existing balance in your CPF Ordinary Account	$ 40,000	$ 10,000

Payment at the time of purchase may comprise the following:

CPF savings	$ 40,000 (b)	$ 10,000 (b)
HDB loan	$ 60,000	$ 90,000
Cash	$ 10,000	$ 10,000
Purchase Price	$ 110,000	$ 110,000
Future CPF withdrawals to repay HDB loan(with interest)	$ 60,000 (c)	$ 90,000 (c)

Note: Future CPF withdrawals to repay HDB loan (c) is the difference between the Valuation Limit (a) and the lump sum CPF savings used at the time of purchase (b). That is, c=a-b.

If your housing loan is still outstanding when your total CPF withdrawals towards payment of the flat had reached the Valuation Limit, you may continue to use your CPF savings to repay the housing loan, provided you have the AHWL⁴.

⁴ FOR MEMBERS BELOW 55 YEARS OLD
The AHWL is the available Ordinary Account balance after setting aside the prevailing Minimum Sum cash component. Savings in the Special Account (including the amount used for investment) and Ordinary Account can be used to meet the prevailing Minimum Sum cash component.

FOR MEMBERS 55 YEARS OLD AND ABOVE
The AHWL is the available Ordinary Account balance less the shortfall in member’s Minimum Sum cash component.

If you are taking up a bank loan:

You can use your Ordinary Account savings, and the future monthly CPF contributions in this account to buy a property and/or pay the monthly instalments of the housing loan up to 100% of the Valuation Limit (VL). The VL is the lower of the purchase price or the value of the property at the time of purchase.

If your housing loan is still outstanding when your total CPF withdrawals towards payment of the flat had reached the Valuation Limit, you may continue to use your CPF savings up to the applicable Housing Withdrawal Limit to repay the housing loan, provided you have the AHWL⁵.

⁵ FOR MEMBERS BELOW 55 YEARS OLD
The AHWL is the available Ordinary Account balance after setting aside the prevailing Minimum Sum cash component. Savings in the Special Account (including the amount used for investment) and Ordinary Account can be used to meet the prevailing Minimum Sum cash component.

FOR MEMBERS 55 YEARS OLD AND ABOVE
The AHWL is the available Ordinary Account balance less the shortfall in member’s Minimum Sum cash component.

Effective Date⁶	Housing Withdrawal Limit
1 Jan 2003 - 31 Dec 2003	150% of VL
1 Jan 2004 - 31 Dec 2004	144% of VL
1 Jan 2005 - 31 Dec 2005	138% of VL
1 Jan 2006 - 31 Dec 2006	132% of VL
1 Jan 2007 - 31 Dec 2007	126% of VL
1 Jan 2008 onwards	120% of VL

⁶ For resale flats, it refers to the date of application received by HDB.

(A)	Valuation Limit (lower of the purchase price or the value of the property at the time of purchase)	= $150,000
(B)	CPF Withdrawal Limit (132% of VL)	= $198,000
(C)	Amount of CPF Used	= $150,000
Additional CPF Allowed = Lower of Balance CPF Withdrawal Limit or AHWL
(D)	Balance CPF Withdrawal Limit = (B) – (C)	=$198,000 - $150,000 = $48,000
AHWL Is Computed As:
(E)	Net Balance in Ordinary Account	= $30,000
(F)	Net Balance in Special Account	= $10,000
(G)	Amount Used under CPFIS–SA	= $30,000
(H)	Total = (E) + (F) + (G)	= $70,000
(I)	Prevailing Minimum Sum Cash Component	= $45,000
(J)	AHWL = (H) – (I) or (E) ie.net balance in Ordinary Account, whichever is lower	$25,000

The additional CPF that can be used to pay the housing loan is $25,000 [(lower of Balance Withdrawal Limit (D) or AHWL (J)].

With effect from 1 Jan 2004, new buyers would have to pay Y% down payment by cash. The balance of the down payment (10% - Y) can be paid using CPF. The table below shows the schedule of Y over the years:

Effective Date ⁷	Cash Downpayment
1 Jan 2004 - 31 Dec 2004	2%
1 Jan 2005 - 31 Dec 2005	4%
1 Jan 2006 onwards	5%

Click here for more information on Public Housing Scheme.

⁷For resale flats, it refers to the date of application received by HDB.

Private property

i) Private Properties with remaining lease of at least 60 years

You can use your Ordinary Account savings and the future monthly CPF contributions in this account to buy the property with remaining lease of at least 60 years, and/ or to pay the monthly instalments of the housing loan up to 100% of the Valuation Limit (VL). This VL is the lower of the purchase price or the value of the property at the time of purchase.

EXAMPLE

Purchase Price	$650,000
Value of property	$600,000
Ordinary Account balance	$123,000
Monthly CPF contributions	$ 2,000

The table below shows how much CPF savings you can use to buy the property

Total withdrawal 100% of valuation - $600,000

Withdrawal on top of Valuation Limit

•	Full Ordinary Account balance for:
	-	Part payment of purchase price
	-	legal and stamp fees

$100,000

$23,000

•

Total future CPF contributions in Ordinary Account ($2,000 per month) to pay the monthly instalments or to make capital repayment of the housing loan

$500,000

Total

$600,000

$23,000

If your housing loan is still outstanding when your total CPF withdrawals towards payment of the property had reached the Valuation Limit, you may continue to use your CPF savings up to the applicable Housing Withdrawal Limit to repay the housing loan, provided you have the AHWL⁸.

Table A - HOUSING WITHDRAWL LIMIT FOR PROPERTY WITH REMAINING LEASE OF AT LEAST 60 YEARS

Date Property Bought	Housing Withdrawal Limit
1 Sep 2002 - 31 Dec 2003	150% of VL
1 Jan 2004 - 31 Dec 2004	144% of VL
1 Jan 2005 - 31 Dec 2005	138% of VL
1 Jan 2006 - 31 Dec 2006	132% of VL
1 Jan 2007 - 31 Dec 2007	126% of VL
1 Jan 2008 onwards	120% of VL

⁸FOR MEMBERS BELOW 55 YEARS OLD

The AHWL is the available Ordinary Account balance after settling aside the prevailing Minimum Sum cash component. Savings in the Special Account (including the amount used for investment) and Ordinary Account can be used to meet the prevailing Minimum Sum cash component.

FOR MEMBERS 55 YEARS OLD AND ABOVE
The AHWL is the available Ordinary Account balance less the shortfall in member’s Minimum Sum cash component.

The following example shows how the additional CPF amount is computed when the 100% Valuation Limit is reached. The computation is based on 132% Valuation Limit and the current Minimum Sum of $90,000 (of which the cash component is $45,000.)

(A)	Valuation Limit (lower of the purchase price or the value of the property at the time of purchase)	= $600,000
(B)	CPF Withdrawal Limit (132% of VL)	= $792,000
(C)	Amount of CPF Used	= $600,000
Additional CPF Allowed = Lower of Balance Withdrawal Limit or AHWL
(D)	Balance CPF Withdrawal Limit = (B) – (C)	=$792,000 - $600,000 = $192,000
AHWL Is Computed As:
(E)	Net Balance in Ordinary Account	= $30,000
(F)	Net Balance in Special Account	= $10,000
(G)	Amount Used under CPFIS–SA	= $30,000
(H)	Total = (E) + (F) + (G)	= $70,000
(I)	Prevailing Minimum Sum Cash Component	= $45,000
(J)	AHWL = (H) – (I) or (E) ie.net balance in Ordinary Account, whichever is lower	$25,000

The additional CPF that can be used to pay the housing loan is $25,000 [(lower of Balance Withdrawal Limit (D) or AHWL (J)].

For properties bought on or after 19 July 2005, you may use your CPF to pay the purchase price of the property after you have paid the first 5% of the purchase price in cash.

If you are buying an Executive Condominium and are eligible for the Housing Grant, you can use the grant to pay the downpayment at the time of signing the Sale and Purchase Agreement and after you have paid the 5% cash payment. However, further CPF, if any, can only be released after you have paid all the cash difference.

ii) Private properties with remaining leases of less than 60 years but at least 30 years

The withdrawal limit will be calculated based on the ratio of the remaining lease when the member is 55 years old, to the lease at the point of purchase. You can use this table to find out the applicable withdrawal limit.

Examples:
(a) A 35 year old member buys a private property with 50 years of lease remaining. When the member turns 55 years old, the property will have 30 years of lease remaining. Hence, the withdrawal limit = 30/50 x 100% = 60% of Valuation Limit.

(b) A 30 year old member buys a private property with 59 years 11 months of lease remaining. When the member turns 55 years old, the property will have 34 years 11 months of lease remaining. Hence, the withdrawal limit = 34/59 x 100% = 58% of Valuation Limit.

Click here for more information on residential properties.

To find out how much you can withdraw from your CPF for housing, log on to our Housing Withdrawal Calculator.

What important factors should I be aware of when using CPF to repay a housing loan?

In addition to the CPF housing withdrawal limits which define the amount of CPF that can be used for housing, members should also be aware of factors like the CPF Minimum Sum requirements when they reach 55 years old, the effect of changes in housing loan interest rates, reductions in the amount of contributions to the Ordinary Account as they get older, etc. Please click here for the list of factors.

When will CPF charges take effect:

a)	For HDB Flat
b)	For Private Property

For HDB flat

The CPF charges will take effect upon the release of CPF savings. The ranking of charge is shown in below:

1^st Charge

Bank's or HDB’s Outstanding Loan

2^nd Charge

CPF principal sum up to 100% of VL plus CPF used to pay the legal and stamp fees in the purchase, and cost of upgrading under the HDB Main Upgrading Programme.

3^rd Charge

Equal ranking

	-	CPF principal sum beyond 100% of VL plus CPF accrued interest
	-	Repayment of outstanding balance of the housing loan interests

4^th Charge

Equal ranking

	-	CPF legal costs and expenses
	-	Bank's legal costs and expenses

Private Property

The CPF charges will take effect on the property before the CPF savings can be released. For properties bought after 1 September 2003, the ranking of charge for private residential properties is shown in Table below:

1^st charge

Outstanding housing loan from your financier

2^nd charge

CPF principal sum up to 100% Valuation Limit plus CPF withdrawals used for the legal and stamp fees in the purchase

3^rd charge

Equal ranking (pari passu)

	-	CPF principal sum beyond the 100% Valuation Limit plus accrued interest
	-	Repayment of outstanding balance of the housing loan interests

4^th charge

Equal ranking (pari passu)

	-	CPF legal costs and expenses
	-	Financier's legal costs and expenses

What happens when you sell:

a)	My HDB Flat
b)	My Private Property

a)	For HDB flat

Upon the sale of your HDB flat, you need to refund the principal amount you had earlier withdrawn for the purchase of the flat, including the accrued interest to your CPF account. This interest is the amount you would have earned, had the savings not been taken out.

If the sale transaction is conducted at fair market value and your sales proceeds are insufficient to repay the outstanding housing loan, plus making the necessary CPF refund in full, you need not top up the shortfall with your own cash. Click here to find out how much you had withdrawn for your HDB flat.

b)	Private Property

Before you sell, mortgage or transfer your private property, you must obtain the consent of the Board. When the property you have bought with CPF savings is sold or transferred, you have to return the CPF savings you have withdrawn as well as the accrued interest to your CPF account. Click here to find out how much you had withdrawn for your private property.

Other Considerations

a) Home Protection Scheme (HPS)

If you are using your CPF savings to pay the housing loan instalments on your HDB flat, you will have to be insured under HPS, subject to good health. The Home Protection Scheme is a mortgage reducing insurance that protects you and your family against losing your home should you become physically/mentally incapacitated or pass away before your housing loans are paid up.

Click here for more information on HPS.

b) Minimum Sum Scheme

Before deciding on the property, do be mindful of the prevailing Minimum Sum that you will need to set aside as savings to support a basic standard of living during retirement. This means that you should not over-commit significant amount of your CPF savings into Housing. Please note that the Minimum Sum will be increased yearly.

Click here for more information on Minimum Sum Scheme

c) Nomination

Properties bought with CPF savings are not covered by CPF nomination, but instead form part of your estate.

For more information on nomination, click here.

To check your nomination status, click here.

If you wish to make a nomination, click here to print the nomination form.

What happens if you divorce:

Going through a divorce is an emotionally difficult time. In addition, one of the key issues that you will have to face is the division of your matrimonial assets. If you have used your CPF to buy your house together, you need to think about what you want to do with your matrimonial home.

If you have used your CPF savings to purchase your property, a charge is created to ensure that a refund is made to your CPF account when you dispose of your property. The required CPF refund (if any) under the various conditions are stated below:

(a)	If you have not turned age 55 yet, you need to refund the principal CPF amount withdrawn together with the accrued interest.
(b)	If you are age 55 and above, and you had pledged your property as part of your Minimum Sum, you will need to refund the pledged amount plus accrued interest.
(c)	If you are age 55 and above and you did not pledge your property as part of your Minimum Sum, you do not need to refund anything.

Do note that you can only sell, transfer, or otherwise dispose of the property when the required CPF refund(s) have been paid to your respective CPF account(s). Otherwise, the charge on the property remains and you will not be able to complete the transaction.

If your matrimonial home is an HDB flat, click here. If it is a private property, click here.

For HDB flats

Upon your divorce, you can choose to dispose of your flat in the following ways:

	Transfer your share to your ex-spouse
	Sell your share to your ex-spouse
	Sell your flat on the open market

You will first need to check with HDB if you are eligible to transfer or sell your flat. Click here to go to HDB’s website.

In the case of a sale (to your ex-spouse or on the open market), you do not need to make a full CPF refund if the selling price is not enough for you to do so. This is provided the flat is sold at fair market value.

For more details on the amount to be refunded if you sell your share of your flat to your ex-spouse, please click here. If you and your ex-spouse are selling the flat on the open market, please click here.

For private property

Upon your divorce, you can choose to:

-	Transfer your share to your ex-spouse
-	Sell your share to your ex-spouse
-	Sell the property on the open market
-	Retain your respective shares in the property

In the case of a sale (to your ex-spouse or on the open market), you do not need to make a full CPF refund if the selling price is not enough for you to do so. This is provided the property is sold at fair market value.

For more details on the amount to be refunded if you sell your share of your property to your ex-spouse, please click here. If you and your ex-spouse are selling the property on the open market, please click here.

If you and your ex-spouse retain your respective shares in the property, neither of you need to make any CPF refunds.

What if I am a bankrupt:

For HDB flats

You may use your CPF savings in your Ordinary Account to buy a flat as well as service the housing loan. However, you must get prior approval from HDB or the Official Assignee if you are buying an Executive flat. If you are above age 55, you may also use your CPF savings in excess of the Minimum Sum cash component in your Retirement Account to buy the flat and repay the housing loan.

If you had used your CPF savings to buy an HDB flat before you became bankrupt, you can continue to use your CPF savings to repay the housing loan.

Please click here for more details if you intend to sell your HDB flat.

For Private Property

You will not be able to use your CPF savings to make a new purchase of a private property after you have been declared a bankrupt. However, if you are already using your CPF savings to repay your housing loan on a private property, you can continue to do so even after you are declared a bankrupt.

Please click here for more details if you intend to sell your private property.

Moving forward

If you had factored in your financial commitments, you may also wish to do an estimation of how much CPF savings you will have when you reach 55. Do try the CPF Retirement Planner to get an estimate of your retirement savings.

Before you make the decision to buy that dream home, do exercise prudence, etc. Buy a house that matches your income. Remember, you do not want to end up being asset rich and cash poor in your old age. Your CPF Savings is for your basic retirement, housing and healthcare needs.