Restrictions on use of CPF to buy older HDB flats to be relaxed by May

Singapore

THE government is looking into relaxing Central Provident Fund (CPF) loan rules on the purchase of older Housing and Development Board (HDB) resale flats, and will announce the changes soon for implementation in May this year.

One issue is the restriction in CPF usage for flats with less than 60 years of lease remaining, National Development Minister Lawrence Wong said in parliament on Thursday.

Some banks also take reference from these restrictions when assessing how much loan to extend. As a result, both CPF and loan quantums are reduced for the purchase of such older flats, he said.

"The CPF rule is intended to safeguard the retirement adequacy of buyers who purchase older flats, but its design has led to some unintended consequences. For example, a buyer of a 39-y…