Can you use CPF savings to buy a home in Singapore?
If you are a Singapore citizen or permanent resident and a CPF member, you can use your Ordinary Account (OA) savings for the purchase of an HDB flat, or for buying or building a private home in Singapore, and towards its housing loan, subject to HDB's or URA's eligibility rules; foreigners are outside CPF. The CPF Board caps the amount: up to the purchase price for a new flat bought from HDB without a bank loan, and otherwise the lower of the purchase price and the valuation. You can use more if you can set aside the Basic Retirement Sum, and less if the remaining lease cannot cover the youngest owner using CPF until age 95; for a second property, you must first set aside the Basic or Full Retirement Sum, unless you will sell the existing one within a 6-month grace period. CPF cannot pay option fees, renovation, or any part of a resale price above the valuation. When you sell, you must refund the CPF used, with accrued interest, to your CPF account; some members who set aside the Full Retirement Sum before 2013 refund less, and if a sale at market value falls short, you need not make up the gap in cash.
Who can use CPF for a home
The CPF Board says CPF helps Singapore citizens and permanent residents set aside funds for retirement. Its page for employers lists foreigners among those exempted from receiving CPF contributions. A 2023 CPF Board news release adds that members who are not citizens or permanent residents have to close their CPF accounts.
What OA savings can and cannot pay for
Under the CPF Board's terms, your OA savings can pay the purchase price, the housing loan or its monthly instalments, and the stamp duty, legal fees and other costs of the purchase or mortgage. They cannot pay option fees. For HDB flats, they also cannot pay booking fees, deposits or the resale levy. Nor can they pay for renovation or repairs, service and conservancy charges, rates and taxes, or any part of a resale price above the lower of the purchase price and the valuation.
With a bank loan, MoneySense's table of loan limits sets a minimum cash downpayment: if you have no other housing loan, at least 5% of the price is paid in cash where the loan is 75% of it, and 10% where the limit is 55%. The CPF Board's terms say your CPF savings are released only after the balance of the price, beyond the loan and the approved CPF amount, has been paid in cash.
How much: the purchase price and the valuation
The CPF Board's terms set these caps by property and loan type, where the remaining lease can cover the youngest owner using CPF until age 95. For a new flat bought direct from HDB with no loan, you can use CPF up to the purchase price. With an HDB loan, you can use it up to the purchase price or the housing loan taken. For a resale HDB flat with an HDB loan, the cap is the lower of the purchase price and the valuation price at the time of purchase. If you can set aside the Basic Retirement Sum (BRS), you can instead use CPF up to the housing loan taken.
The same lower-of-the-two cap applies to an HDB flat bought with a bank loan and to a private home bought from 1 September 2002. If you can set aside the BRS, you may use up to an additional 20% of that figure. The CPF Board's terms add a condition for a second or later property bought from 10 May 2019. You must first set aside the latest BRS if at least one property bought with CPF, or the one you are buying, can cover you until age 95. Otherwise, you must first set aside the latest Full Retirement Sum. If you will sell the existing property, you have a 6-month grace period.
Shorter leases and the age 95 test
For a property bought from 10 May 2019 whose remaining lease does not cover the youngest owner using CPF until age 95, the CPF Board caps CPF use at a percentage of the lower of the purchase price and the valuation price. If the remaining lease is 20 years or less at the time of purchase, no CPF savings can be used.
Once the owners' total CPF use reaches this pro-rated limit, you cannot use more OA savings for the property, whether or not you have set aside the BRS. The CPF Board explains that the cap helps owners keep enough savings for their housing needs in retirement.
Refunding with accrued interest
When you sell the property, or transfer or sell your share of it, the CPF Board requires you to refund the CPF principal you withdrew plus the accrued interest. If you are 55 or above and pledged the property to make up your retirement sum, you must also refund the pledged amount. If you are below 55, the refund is credited to your OA, and you can use it for another property.
Sometimes a property sold at market value does not fetch enough to cover the outstanding loan and the CPF refund. The CPF Board says that in that case you refund only the selling price less the outstanding loan, and you do not pay the shortfall in cash. Option money the buyer pays you in cash is treated as part of the price, and you must refund it before the sale can complete. Members who were 55 or older, and had set aside the Full Retirement Sum (FRS), before 1 January 2013 refund less than the principal plus interest.
Keeping some savings in the OA
The CPF Board lets you keep some OA savings as a safety net for your instalments during a temporary loss of income. If you take an HDB loan, you can choose to retain up to S$20,000 in your OA, and you decide this at the point of purchase. If you take a bank loan, you can retain any amount, and the CPF Board recommends at least S$20,000.