Use of CPF Savings for Housing Loan for Flats with Less Than 60 Years Lease

Ms Joan Pereira asked the Minister for Manpower (a) what measures are in place to ensure that potential property buyers are informed of the limitations on the use of CPF savings when taking a housing loan for flats with a remaining lease of less than 60 years; and (b) what recourse do buyers have if they commit to buying such flats and subsequently find that they are unable to pay for the flats in cash.

Mr Lim Swee Say: The limitations on the use of CPF savings for HDB flats and private properties with a balance lease of less than 60 years were put in place to protect the recoverable value of CPF savings used for housing purchases.

The Central Provident Fund Board (CPFB) and the Housing and Development Board (HDB) have put in place several measures to inform and advise prospective flat buyers on these CPF limitations.

CPF Board's website provides an online calculator, e-brochure, and a set of 'Frequently Asked Questions' to help prospective property buyers compute the maximum amount of CPF savings that they can use for shorter lease properties. They can also approach CPF Board for this information.

For prospective buyers purchasing flats directly from HDB, HDB provides them with a Financial Plan during the flat selection process. This Financial Plan also explains the CPF withdrawal limits for flats with balance leases of less than 60 years, which are sold under HDB's Sale of Balance Flats exercises, if any.

For prospective buyers purchasing resale flats in the open market, they are required by HDB to complete and submit a 'Resale Checklist' which highlights the need to check the balance lease of the flat, and which informs them that there may be limits on the use of CPF savings for shorter lease flats. Those who choose to engage the services of a salesperson can consult the salesperson on the relevant rules and procedures governing the use of CPF funds.

The HDB website also highlights these CPF limitations as part of their e-resources on financial planning.

For individuals who have purchased shorter lease flats and subsequently face short term financial difficulty in servicing their remaining HDB housing loan in cash, HDB may assist deserving cases temporarily with their instalment payment and loan arrears on a case-by-case basis.