The 5% cash only happen when you take a bank loan. For HDB loan, it is a different story. Are you sure you process the similar case before? If no, could you check the HDB website carefully?
The CPF Housing Grant can be used to pay towards the purchase of the resale flat or to reduce the mortgage loan. Hence, if you do not have enough CPF savings, the grant can be used to pay for the initial payment towards the purchase. The balance, if any, must be used to reduce the mortgage loan. However, the grant cannot be used to offset the cash payment where the declared resale price exceeds the market valuation.
If you are buying the resale flat with a bank loan, the CPF Housing Grant will be treated as part of your CPF fund. It can be used to pay for the CPF portion of the initial payment towards the purchase of the resale flat or to reduce the mortgage loan. It will be included in the computation of the CPF withdrawal limit.
The treatment of the initial payment in CPF fund and cash for buying resale flats with bank loans is as below:
Minimum Cash/CPF Payment
Total
Cash
CPF
(including Housing Grant)
5%
5%
10%
Note:
(a) The cash payment is computed based on the lower of the market valuation or resale price.
(b) The cash payment is in addition to the cash-over-valuation ('cov') for cases where the transacted resale price is above market valuation. Resale flat buyers must pay the 'cov' in cash.
