No, you cannot use CPF to pay the loss incurred when your HDB flat is sold at a negative proceed.
Here's how it works:
Negative Sale Proceeds: This occurs when the selling price of your HDB flat is less than the outstanding mortgage loan and the accrued CPF interest. This means you don't have enough cash to refund the amount you used from your CPF Ordinary Account (OA) and the accrued interest back into your OA.
CPF Refund: When you sell your HDB flat, you are required to refund the following to your CPF OA:
The principal amount withdrawn to pay for the property.
The accrued interest, calculated at 2.5% per annum, on the withdrawn amount.
No Cash Top-up Required: In the case of a negative sale, you are not required to top up the shortfall with cash. The property must, however, be sold at or above the current market value.
CPF Allocation: After paying off the outstanding mortgage loan, the remaining sales proceeds (even if negative) will be allocated between the owner and co-owner's CPF accounts, according to their respective share of the property.
Deposits Forfeited: Any deposits collected from the buyer (option fee and option exercise fee) will be forfeited and returned to your CPF OA.
Important Note: While you don't need to pay the shortfall with cash, a negative sale can affect your future housing options. For example, if you want to buy another HDB flat, you might need to use more cash for the down payment since your OA balance will be reduced.
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