Use of CPF Savings for Housing Loan for Flats with Less Than 60 Years Lease
Ministry of ManpowerSpeakers
Summary
This question concerns Ms Joan Pereira’s inquiry into measures informing property buyers of CPF usage limits for flats with less than 60 years of lease and the recourse for those unable to pay in cash. Minister for Manpower Lim Swee Say stated that these limitations protect the recoverable value of CPF savings, with information provided through the CPF website's calculators and HDB’s Financial Plans. Resale buyers are alerted through a mandatory Resale Checklist and online e-resources, while those using salespersons can consult them on relevant rules. To address financial difficulties, HDB provides case-by-case assistance to deserving buyers for instalment payments and loan arrears. This support specifically targets those who have already committed to a purchase and subsequently face challenges in servicing their remaining housing loan in cash.
Transcript
72 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 the Central Provident Fund (CPF) savings for Housing and Development Board (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 CPF Board and 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 (FAQs) 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.