Purchasing a home is not an easy feat, especially for first-timers. The hefty 10% down payment, the monthly servicing of the loan instalment and not forgetting the soaring prices of properties are reasons good enough to put the idea of home-buying in the back burner for many people. If you are one of them, it might come as a relief to know that you can withdraw from your Employees’ Provident Fund (EPF) Account 2 savings to pay for a home purchase.

How Your Money Is Apportioned In EPF?

Every EPF member’s contributions are allocated into two types of accounts as below:

Account Type	Contribution (%)	Purpose of Account
Account 1	70%	Retirement
Account 2	30%	Home Purchase Building A Home Health Expenses Education (Your own or your children’s) Reduce/Settle Housing Loan Housing Loan Monthly Installment Perform the Hajj

As per the table above, you can see that the amount you have in your Account 2 can also be used to finance your home purchase or to settle/reduce your housing loan.

1. For The Purpose Of Purchasing A Home

For this purpose, the eligibility criteria are as below:

1. • Below 55 years of age
   • Strictly for the purchase of residential property. Residential property includes bungalow / terrace / semi-detached / apartment as well as / studio apartment / condominium / service apartment / SOHO / townhouse or a shop apartment though these properties are held under commercial title. Take note that there are some apartments popularly known as service apartments which are held under commercial title but are classified for residential property
   • You have at least RM500 in your Account 2
   • Eligible for only one property. If you have made a prior withdrawal for such purposes, you will be required to show proof that the property concerned had been disposed of prior to making a subsequent application for withdrawal to finance a subsequent purchase of a residential property.
   • Withdrawal is to part finance a residential property and not for other purposes such as renovation, improvements and/or purpose of furniture
   • You are allowed to withdraw regardless whether you are purchasing the residential property with your own fund or with assistance of a loan from recognised banks/financial institutions
   • You are eligible to make such withdrawal application at any time within 3 years from the date of of the SPA
   • Open to Malaysian citizens as well as non-citizens who have been active contributors. Non-citizen members must have obtained a Permanent Resident (PR) status
     

     Amount That You Can Withdraw

     	Individual Withdrawal	Joint Withdrawal
     Housing Loan	(Purchase Price – Approved Loan Amount) + 10% of the purchase price OR Entire savings in Account 2 (whichever is lower)	(Purchase Price – Approved Loan Amount) + 10% of the purchase price OR Entire savings in Account 2 (whichever is lower)
     Self-Financing	Purchase Price – Approved Loan Amount) + 10% of the purchase price OR Entire savings in Account 2 (whichever is lower)	Cost of Purchase + Additional 10% OR Entire savings in Account 2 (whichever is lower)

     In cases of joint purchasers where they intend to make applications for withdrawal, EPF will first process the application of the member whose name is mentioned first in the sale and purchase agreement, and if the amount approved for the first member is insufficient to cover the amount as per the formula above, then EPF will process the application of the subsequent member named in the sale and purchase agreement.

     Documents Required

   • KWSP Form 9C (AHL). The form also provide a checklist of all other documents that are required in various circumstance, example, different documents are required when the purchase is from a housing developer or from an individual and/or whether the property is with or without individual title, or whether it is for a first home or a second home

   • Original and photocopy of MyKad for MyKad holders only. Non-citizens are required to bring an original and photocopy of their identification documents (passport)

   • Sale & Purchase Agreement (SPA) that is not more than 3 years from the date of signing

   • Your bank’s account statement or passbook

   • For joint withdrawals, you may be required to provide document stating the proof or relationship. Joint withdrawals by non related individual, EPF may require a written explanation as to reason for the joint purchase

2. For The Purpose Of Setting or Reducing Your Housing Loan

For this purpose, the eligibility criteria are as below:

• • Open to Malaysian citizens as well as non-citizens
  • Below 55 years of age
  • There is an outstanding loan given by a bank / financial institution recognised by EPF whereby the bank/financial institution had provided a loan to part finance the purchase of a residential property.
  • You must be the registered owner of the property.
  • Application may be made on a yearly basis
  • You have at least RM500 in your Account 2
  • The property concerned had been assigned and/ charged to the bank as a collateral

    For a member who intend to do a withdrawal to help their spouse, the property concerned can either be jointly-owned by the member and the member’s spouse or fully owned by the spouse and that, the housing loan is under the spouse’s name.

    Amount That You Can Withdraw

    Individual Withdrawal	Joint Withdrawal
    Balance of the total housing loan OR Entire savings in Account 2 (whichever is lower, but is subject to a minimum of RM500)	Balance of the total housing loan OR Entire savings in Account 2 (whichever is lower, but is subject to a minimum of RM500)

    Documents Required

  • Original and photocopy of MyKad. Non-MyKad holders are required to fill and present the KWSP 9C (AHL) (D8) and its checklist

  • Housing loan balance statement issued by the bank or the financial institution;

  • Refinancing information. This is only applicable for first and subsequent withdrawals, with or without re-financing. If you have refinanced more than once, you are required to present all Debt Redemption documents from your previous banks/financial institutions.

  • Should the information in your housing loan balance statement is incomplete, you will be required to present your SPA / Mortgage Form / Deed of Assignment

  • Proof of sale/disposal of first house, if applicable

  • For the purpose of assisting your spouse, you will be required to present your marriage certificate

Method of Application

You can choose between manually applying for the withdrawal by walking-in to any EPF office, or you can also apply through the i-Akaun portal on EPF’s website. However, first time applicants will still be required to be present at the EPF counter to obtain a temporary username and password. Within 30 days after that, you should login to the i-Akaun portal with the temporary username and password given, and then proceed to register. Once done, you should change to your own username and password and continue to the Withdrawal section to start your application.

Subsequent applications can be done through i-Akaun without the need to walk-in to the EPF counter.

Payment Methods

For home purchase withdrawal, the full payment will be credited to your bank account while for housing loan settlement/reduction and spousal assistance, the amount required will be credited into your/your spouse’s housing loan account provided that these three main requirements are met:

• • The loan account is attached to a panel bank recognised by EPF
  • The loan is not under a Non-Performing Loan (NPL) status
  • The loan account is still active

We hope the above guide gives you a basic outline of how you can use the money in your EPF Account 2 to ease your finances in the process of purchasing a home or settling/reducing your existing home loan. For detailed information, you can walk-in to the nearest EPF office or send your enquiry to KWSP.

The statement and information in the articles are the opinion of the writer and meant only as a guide. Any property purchase, rental or lease involve many legal issues and other complication depending on the individual facts and circumstances. Readers and Users are strongly advised to seek professional advise including from qualified and competent lawyers, bankers and/or real estate agent to verify the information and the statement before embarking on any purchase, rent or lease of any property. To the fullest extent permitted by law, we exclude and disclaim liability for any losses and damages of whatever nature and howsoever cause and arising including without limitation, any direct, indirect, general, special, punitive, incidental or consequential.