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Quick Guide: Using Your CPF Fund to Purchase an HDB Flat or Condo

CPF funds are meant for retirement needs and can be withdrawn on your 55th birthday.

It earns a very attractive interest rate which can increase your retirement funds. CPF funds in your ordinary account (OA) can also be used to purchase a home, be it an HDB flat or private property.

In today’s article, we take a look at using your CPF funds to purchase a property.

According to the CPF website, the money in your CPF OA can be used for the following transactions:

  • Payment for the purchase of an HDB flat or DBSS flat

  • Repayment of monthly instalments of housing loan

  • Payment of stamp duty, legal fees and other related costs incurred during the purchase or mortgage of an HDB flat or DBSS flat

  • Payment of the costs incurred during the upgrading of an HDB flat under the HDB Main Upgrading Programme and/or the Lift Upgrading Programme

CPF savings cannot be used for the following:

  • Payment of booking fees, option fees or deposit for HDB flat or private property

  • Payment of resale levy

  • Payment of construction works, improvements, repairs and/or renovation

  • Payment of monthly service and conservancy charges

  • Buying an overseas property

Before you jump in to buy a property using your CPF funds, consider the following points carefully before proceeding.

1. Work out your finances

Even though you can use all your OA funds to buy a property, there is still a need for payment by cash.

When buying an HDB flat and if you are taking a loan from the HDB, the downpayment of 15% can be paid using CPF funds, but if you take a bank loan, the down payment is 25%, of which 5% must be in cash.

Buying a new under-construction private property requires a 20% deposit, of which 5% must be in cash.

For resale, the deposit for an HDB flat must also be paid in cash and for private properties’ option fee of 5%, 1% of it must be in cash.

So, before committing to buying a property, do not think that everything can be paid using your CPF funds.

2. Understand the Withdrawal Limits

When deciding on which property to buy, take note of the withdrawal limits so that you do not over-commit and be caught with insufficient finances.

You have to take into consideration the Valuation Limit (VL) and the Withdrawal Limit (WL).

The VL is the lower of the valuation of the property you are buying and the actual purchase price. For eg., if the valuation of the property you are eyeing is $500,000 and you are buying it at $550,000, the VL is $500,000.

The WL, which is the maximum that you can use to buy the property, is 120% of the property’s valuation.

For the above example, the WL is $600,000. If your property purchase price is more than $600,000, the balance will have to be paid in cash or through a bank loan.

You can find out how much of your OA funds you can use to buy a property by using the CPF calculator.

3. Remaining OA balance

Previously, you had to use all your OA funds to pay for the purchase of a property before taking a loan from the HDB. That left many with limited retirement opportunities.

Nowadays, you can set aside up to $20,000 in your CPF OA as an emergency fund.

This can be used to pay for the monthly housing loan in the unfortunate event of loss of income or job loss.

The $20k in the OA will continue to earn an attractive interest and help to grow your retirement fund.

The most important thing to note when using CPF funds to buy property is that when you sell the property, you will need to return the amount you withdraw to pay PLUS accrued interest (2.5%).

If the proceeds from selling the property are not enough to cover the required CPF refund, do not fret, as long as you have sold the property at market value, you do not need to top up the shortfall.

Once the proceeds are refunded into your CPF savings, you can use them again if you are buying another property.

CPF funds are meant for retirement and are risk-free, earning an attractive interest and as such, we have to be very careful when using them for investment purposes, be it property or other forms of investment.


Are you looking for a new home or the latest resale listings? Head to to browse your preference of properties for sale in 3D.

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