Terms and Conditions for Residential Properties Scheme

Memorandum of Mortgage (0.06MB)

CPF Conveyancing Panel of Lawyers

Application for law firms interested to be on the Board's conveyancing panel is open twice a year, i.e. in late March/early April and late September/early October. Interested applicants should look out for the application details and qualifying criteria which will be shown on the Law Society's website in late March/early April and late September/early October each year.

• make direct payment to the property developer or vendor to buy a residential property
• repay a housing loan to buy the residential property
• repay a housing loan taken to buy land and construct a house on the land

If you are buying a property for the first time, the Annex in this handbook gives a quick summary of the general procedures involved.

EXAMPLE

You intend to use your CPF savings to pay:
a) part of the purchase price
b) the monthly instalments of the housing loan
c) the legal and stamp fees (say, $23,000)

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

If your housing loan is still outstanding when your total CPF withdrawals towards payment of the property had reached the Valuation Limit and you are below the age of 55 years, you may continue to use your CPF Ordinary Account savings to repay the housing loan if you can set aside the prevailing Minimum Sum cash component. Savings in the Special Account (including the amount used for investments) and Ordinary Account can be used to meet the prevailing Minimum Sum cash component.

However if you are 55 years and above when the Valuation Limit is reached, you may use the excess CPF Ordinary Account savings to repay the housing loan after setting aside your Minimum Sum cash component shortfall.

Table A - HOUSING WITHDRAWAL LIMITS FOR PROPERTY WITH REMAINING LEASE OF AT LEAST 60 YEARS

The applicable WL is set at a level that covers the estimated depreciated value of the property when the member reaches the CPF withdrawal age of 55 years. It is calculated based on the ratio of the remaining lease when the member is 55 years old, to the lease at the point of purchase.

Example:
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 applicable WL = 30/50 x 100% = 60% of *Valuation Limit

* Valuation Limit is the lower of the purchase price or the value of the property at the time of purchase.

For details of applicable WL, please refer to Table C - Allowed Withdrawal Limits (in %) for Properties with Remaining Leases less than 60 years but at least 30 years in Annex B.

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.

With the withdrawal of the stamp duty concession from 15 December 2006, stamp duty is now payable within 14 days from the date of the Sale and Purchase agreement or the date of acceptance of the option to purchase. You will now need to use cash or take up loans to pay the stamp duty first, and subsequently apply for reimbursement from your CPF when your lawyers submit your application to use CPF for the property purchase.

For completed properties, the request for one-time reimbursement of stamp duty from your CPF should be submitted together with the request for CPF lumpsum drawdown on completion. For properties under construction, if you have used cash to pay the stamp fee first, you may apply for one-time reimbursement of stamp duty paid not later than legal completion.

Yes. The Board requires a charge on the property before the CPF savings can be released. The ranking of charge for private residential properties is shown in Table B.

Table B - RANKING OF CHARGE

 Can I use my CPF savings for renovation, improvements and repairs to the property?

Yes, you can. However, if there is an existing property on the land, you must furnish Urban Redevelopment Authority (URA)’s grant of written permission for the proposed “reconstruction” or “erection” of the new property. You can only withdraw your CPF savings after the Temporary Occupation Permit for the house has been issued. As such, you need to obtain a loan to finance the construction first, and later apply to use your CPF savings to repay this loan.

If you are using your own savings to pay for the land and construction costs, you can be reimbursed for these from your CPF savings provided the house is constructed after 1 October 1993, and construction has commenced within 6 months from the completion date of the purchase of the land.

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.

• Members of the immediate family e.g. spouses, parents, children and siblings or

• Non-related singles (unmarried, divorced or widowed) provided that they are currently not using CPF for any existing properties.

The total CPF amount that can be withdrawn (lumpsum and monthly installments) by all the joint owners should not be more than the withdrawal limit allowed.

If you currently own more than one property bought with CPF savings before 1 July 2006, you need not set aside the prevailing Minimum Sum cash component unless you subsequently buy another property using your CPF savings on or after 1 July 2006.

Please note that this is not applicable if you are applying to use your CPF to purchase a second or subsequent property with non-related singles. Non-related singles can only jointly use their CPF to purchase their one and only property (private property or HDB flat).

For properties with more than 30 years but less than 60 years of lease, the withdrawal limit would be determined based on the age of the co-owners and remaining lease of the property. Please refer to Annex B for the details.

If your current HDB flat is bought using CPF savings, you can only use your CPF after you have set aside in your Ordinary and Special Accounts (including the amount used for investment from the Special Account) the prevailing Minimum Sum cash component if you are below 55 years, or the Minimum Sum cash component shortfall if you are aged 55 and above. Withdrawals for the new private property will be subject to a Withdrawal Limit of 100% Valuation Limit for properties with at least 60 years of lease, and the applicable Withdrawal Limit for properties with remaining lease of less than 60 years but at least 30 years.

However, if you intend to sell your existing HDB flat, the Board will allow a grace period for you to sell off your HDB flat. During the grace period, the Minimum Sum cash component requirement will not apply. The grace period is as follows:

(i) If you are buying a completed property – you will be given a grace period of six months to sell off your HDB flat; or

(ii) If you are buying a property still under construction– you will be given a grace period of six months from the issuance of Temporary Occupation Permit (TOP) to sell off your HDB flat.

After the grace period, CPF withdrawals will be stopped for your private property purchased, if you do not meet the Minimum Sum cash component requirement.

If you have bought your first property before 1 July 2006, and apply to use CPF for the first property only after making an application to use CPF for the second property bought after 1 July 2006, the multiple property (MP) rule will apply to the second property. For example:

The multiple property rule would be applied to you and your co-owner as follows:   Member A Member B Property 1 bought before 1/7/06 Use CPF (not owner / owner but not using CPF) Property 2 bought in July 2006 Use CPF Use CPF WL for member under Property 2 100% VL 132% VL WL for Property 2 132% VL Set aside MSCC for Property 2 Yes NA

Member A can only use CPF for Property 2 up to 100%VL, and Member B can use CPF for Property 2 up to 132%VL. The WL at property level for Property 2 is capped at 132%VL. When the total amount used by both Member A and Member B reaches 100%VL, withdrawal from Member A's account will be stopped, and Member B can continue to use CPF up to 132%VL.

You need to apply to withdraw your CPF savings via my cpf Online Services – My Requests. Alternatively, you can authorise your lawyer to submit it on your behalf. Your application should be accompanied by a valuation report prepared by a licensed valuer.

STEP 2

If your application is approved, the Board will send you a Letter of Approval 8-10 days after receiving your application form giving in-principle approval for the use of your CPF savings. Your case will then be referred to the Board's solicitors to prepare the legal documents. You should instruct your solicitors to provide the Board's solicitors with all the necessary information and documents to complete the legal documentation.

STEP 3

Your CPF savings will be released through the Board's solicitors after all documentation have been completed. Legal documentation normally takes 6 to 8 weeks.

Yes, you may use the CPF savings in your Ordinary account and future contribution that is paid into the Ordinary Account to service the housing installment in full. However, please take note of the following:

For more information, please refer to the CPF Contribution Rates Table which is available at any CPF Service Centres and CPF website at http://www.cpf.gov.sg.

Please submit your application on-line through the CPF website with your SingPass.

Alternatively, you can submit a hardcopy Form 4B to make a capital repayment towards your housing loan. You can obtain the form at the CPF website under Members->General Information->Forms (View & Print). For capital repayments, you would need to obtain your financier’s endorsement on the form before submitting to the Board.

Please submit your application on-line through the CPF website with your SingPass.

Alternatively, you can submit a hardcopy Form Arrears to make an arrears payment towards your housing loan. You can obtain the form at the CPF website under Members->General Information->Forms (View & Print). For arrears payments, you would need to obtain your financier’s endorsement on the form before submitting to the Board.

When you refinance your housing loan (i.e. there is a new contract between your bank and you), your new CPF Withdrawal Limit will be capped at x% of Valuation Limit, subject to sufficient AHWL. The x% of Valuation Limit corresponds to the date you re-finance your loan (determined by the date you sign the contract with your bank - please refer to Table 1 under question 3 for schedule of x%). When you sell the property, the sale proceeds will first be used to pay off your housing loan, followed by the CPF principal amount and accrued interest.

If you are currently using the Medisave overflows to service your monthly instalment payments, you may appeal to the Board in writing to continue to use the Medisave overflows to Special Account to service it, provided you meet the following conditions:

Yes, you can. However, you must obtain the consent of the Board before the property is sold, mortgaged or transferred. When the property you bought with CPF savings is sold or transferred, you have to return the CPF savings withdrawn and the accrued interest to your CPF account.

(a) For properties bought before 1 September 2002 and not refinanced after 1 September 2002

The sales proceeds will be used to pay the following, in this order:

(1) CPF principal amount withdrawn
(2) Outstanding housing loan
(3) CPF accrued interest

If the partshare selling price is less than or equal to your CPF principal amount withdrawn, you will only need to refund the partshare selling price.

If the partshare selling price is not enough for the required CPF refund, we will collect the principal amount withdrawn and part of the accrued interest. This is provided the property is sold at fair market value.

Example

A & B bought a private property at $800,000 as joint tenants. Both A and B used their CPF savings for the purchase. A is selling his share of 50% to B.

Selling price for 100% share = $800,000
A’s partshare selling price = $400,000
Outstanding housing loan = $580,000

Amount withdrawn:

Base on the calculation above, the partshare selling prices is not enough for the required CPF refund. As such, A is required to refund the higher amount of $110,000 as calculated by Formula 1.

(b) For properties bought on or after 1 September 2002 or refinanced on or after 1 September 2002

The sales proceeds will be used to pay the following, in this order:

(1) Outstanding housing loan
(2) CPF principal amount withdrawn plus accrued interest

If the partshare selling price is not enough to pay your share of the outstanding housing loan and your required CPF refund, your refund amount will be the higher of the two calculated by the formulae below:

The refund is capped at the partshare selling price or the required CPF refund, whichever is lower. This is provided the property is sold at fair market value.

Please refer to the example below.

Example

A & B bought a private property at $800,000 as joint tenants. Both A and B used their CPF savings for the purchase. A is selling his share of 50% to B.

Selling price for whole property = $800,000
A’s partshare selling price = $400,000
Outstanding housing loan = $500,000
A’s share of outstanding housing loan = $250,000

As A’s partshare selling price ($400,000) is not enough to pay A’s required CPF refund and his share of the outstanding housing loan ($350,000 + $250,000 = $600,000), we have to compute his CPF refund using Formulae 1 and 2.

CPF refund calculated using Formula 1
= $400,000 – (50% x $500,000)
= $150,000

CPF refund calculated using Formula 2
= $350,000 x ($800,000 - $500,000)
   -------------
   $375,000
= $280,000

In this case, we will collect the higher amount of $280,000 as calculated by Formula 2.

If you sell your property on the open market, you will need to pay the required CPF refund to your CPF account.

If the sales proceeds (including option monies) are not enough to pay the required CPF refund and the outstanding housing loan, the sale proceeds will be used to settle the required CPF refund and the outstanding housing loan in the order agreed among you, your mortgagee and the CPF Board.

For properties bought before 1 September 2002 and not refinanced after 1 September 2002

The sales proceeds will be distributed in the following order:

For properties bought on or after 1 September 2002 or refinanced on or after 1 September 2002

The sales proceeds will be distributed in the following order:

The amount to be refunded to your CPF account upon the sale of the property depends on when the property is sold. For details, please see the table below.

No. The existing distribution of sale proceeds as agreed by you, your financier and the Board will continue to apply. Thus, the sale proceeds will be first used to refund the CPF used, followed by the outstanding housing loan.

Yes, you can re-use the CPF savings and the accrued interest that have been refunded to your CPF account.

When a member passes away, the CPF savings withdrawn from his CPF account for the property need not be refunded to his account. The property will form part of his estate if it is held in tenancy-in-common or will pass on to the remaining surviving owner(s) if it is held in joint-tenancy.

The title deed can be returned for your own safe-keeping when the housing loan taken for the purchase of the property is fully paid up and there are no other outstanding mortgages on the property. You only need to discharge the CPF Charge when you sell your property. Any legal cost incurred in the discharge of Charge will have to be borne by you.

A CPF charge is created on the private properties that are bought with CPF savings to secure the refund of CPF monies withdrawn, including interest, when the property is sold.

The CPF charge can be discharged in the following circumstances:

1)	When you sell your property The CPF charge will be discharged when the required CPF refunds are returned to your CPF Account after the sale of your property. Your lawyers handling the sale should complete the discharge as part of the transaction.
2)	When you have reached 55 years old, is the sole owner of the property, and have set aside the required Minimum Sum If your title deeds are with the Board, they will be returned to you for safekeeping if there are no outstanding mortgages on your property. For this instance, discharging the CPF charge is optional as the amount secured under the charge effectively becomes zero if you have set aside the required Minimum Sum fully in cash upon reaching age 55. However, if you still wish to discharge the CPF charge, you may either engage a lawyer to do so or do it yourself if you are familiar with the conveyancing procedures. These are the steps required if you wish to discharge the CPF charge yourself: a. Inform the Board to cease the monthly CPF payments (if applicable) to your financier/mortgagee. b. Confirm that there is no CPF mortgage lodged in respect of the CPF monies released for your property. c. Confirm that the housing loan taken for the purchase of your property is fully redeemed. If you are still servicing your loan, please confirm that you will no longer be using CPF to pay for your mortgage. d. Submit a copy of the engrossed discharge of the CPF charge for the Board's execution. Please note that the discharge must be prepared in an approved form obtained from Singapore Land Authority (SLA). Click here for the sample copy of the approved form. e. Ensure that you are in possession of the title deeds of your property before lodgement of the discharge. f. Submit an updated title search of the property for which you are discharging. g. Liaise with SLA regarding the lodging of the duly executed discharge. Alternatively, click here for the procedure to prepare and lodge a discharge. h. After finalising the lodgment of discharge with SLA, provide the Board with particulars of the discharge. Note: You will have to incur lodgment fees imposed by SLA when the Discharge of CPF charge is lodged, regardless of whether you have engaged lawyers for the procedures. (The lodgment fees are payable by way of NETS, CashCard or Credit Card.)
CONTACT US   FOR ENQUIRIES, PLEASE CALL THE CPF CALL CENTRE AT 1800-227-1188 OR E-MAIL TO Private-housing@cpf.gov.sg OR FAX TO 6229 3355

ANNEX A

If you are buying a property for the first time, you may wish to consider the following before committing yourself to the purchase.  1. Check your eligibility