Can the Housing Grant be used to reduce the downpayment if you are taking HDB loan?

Hi there,

You can view this source to better understand your concerns.

Housing grant can be used to reduce your overall purchase price, which includes the 10% downpayment. This is to reduce your subsequent mortgage, by making it as low as possible for affordable payments via CPF.

To make it simpler for yourself, unless you are purchasing the flat alone @ 35, you will need to be able to cover 5% of the purchase price via your CPF pre-grants. As depending on whether its a resale or BTO purchase, the grants may or may not be there. 5% of most of today's purchase price is attainable if you are working.

For most of your planning with regards to planning for a BTO purchase, 100% of your outlay will be via your CPF, and you are required to wipe out your CPF-OA, or leave 20k, for a HDB loan to be disbursed. There should not be any cash outlay on your end, unless your CPF balances are grossly insufficient. You will just need to plan at least 30-50k for renovations and furniture, which over the span of 5 years, would amount to 25k/5k per year, to account for this.

Once you break it down, its not so daunting! Hope i was able to address your queries!

Second scenario is the correct one.

The 10% downpayment amount will be of the BTO purchase price, not 10% of the purchase price less grant.

If you are eligible for the grant, the grant will just be credited to your CPF Ordinary Account for you to utilise, can even use it for the downpayment.