Rules on CPF usage and HDB housing loans updated to ensure homes for life

Under the changes, CPF funds and HDB loans will not be granted to fund the purchase of flats with 20 years or less left on the lease. ST PHOTO: KUA CHEE SIONG

SINGAPORE - Home buyers can draw more from their Central Provident Fund to buy ageing flats from Friday (May 10), provided the property's remaining lease covers the youngest buyer till the age of 95.

They would also be entitled to the maximum Housing Board loan of 90 per cent of the property price or valuation if they are buying resale HDB flats, according to a joint statement by the ministries of Manpower and National Development on Thursday.

This comes as the Government shifts the rules to focus on whether a property can last a home owner for life, instead of its remaining lease.

The move ensures that buyers have a roof over their heads in their old age - a nod to people living longer, when life expectancy is currently at 85 years.

But it also recognises that some buyers may have their reasons for buying older properties, such as to stay near their parents, and this creates more flexibility for flats to change hands in an otherwise illiquid market.

Most buyers will not be affected by the changes. About 98 per cent of HDB households and 99 per cent of private property families have a home which lasts them to 95 years and older, MND said.

But with the new rules, middle-aged buyers can buy ageing flats and face fewer restrictions on their CPF usage.

For example, a couple who are 45 years old can pay for a resale flat with 50 years left on its lease using more CPF savings.

They can use their CPF to pay up to 100 per cent of the valuation limit - the property price or valuation, whichever is lower - compared to 80 per cent previously. Their housing loan would remain the same.

On the other hand, younger buyers who buy older flats have to be prepared to fork out more cash.

For example, a couple aged 25 who buy a flat with 65 years of lease remaining can use their CPF to pay only 90 per cent of the valuation limit, down from 100 per cent. They would also be entitled to a smaller loan limit of 81 per cent, compared to 90 per cent.

Under the changes, CPF savings and HDB loans will not be granted to fund the purchase of flats with 20 years or less left on the lease.

Previously, CPF restrictions kicked in when a flat has between 30 years and less than 60 years left. Buyers could use their CPF if the remaining lease covered the youngest buyer till age 80, while the total amount of funds that could be used would be pro-rated.

Similar restrictions applied to HDB loans, except that the resale flat could only have 20 years of lease left.

The rules will kick in from Friday for new applications and agreements for Housing Board flats and private property purchases.

Buyers who are currently using their CPF to service their housing loans will continue to use their funds based on the old rules. Those who are midway through a property purchase can ask the CPF Board or HDB for assistance.

While it is unclear how this may affect housing loans by banks, the ministries said in their statement: "Banks also take reference from CPF restrictions when assessing how much loan to lend."

Other changes to using CPF


When CPF members turn 55 years old, some may wish to withdraw their CPF savings.

Previously, they could withdraw any amount above the Basic Retirement Sum (BRS), if they pledged a property with a remaining lease of at least 30 years.

From Friday, this remaining lease will be raised to at least 40 years, to ensure that their flat covers them to age 95.

This change is not expected to affect most CPF members, as all HDB flats and the vast majority of private properties have leases that can last a 55 year old till age 95.


Previously, CPF members had to set aside the BRS before excess Ordinary Account monies could be used to purchase subsequent properties.

From Friday, members who do not have a property that covers them till age 95 will need to set aside the Full Retirement Sum - twice the BRS - before they can use excess OA funds to buy other properties.

Members who have a property whose remaining lease covers them till age 95 will not be affected.


For purchases from Friday, the remaining lease of the property must cover the buyer till he is age 95 in order for him to use Retirement Account savings above the BRS to pay for his property.

Members approaching age 55 can ask the CPF Board to reserve their OA savings so they may continue servicing their mortgage payments after their 55th birthday.

Those facing difficulty servicing their housing loans can approach the HDB or CPF Board for assistance.

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