6 Types of EPF Account 2 Withdrawals for House

EPF Akaun Sejahtera, also known as KWSP Account 2, has been a knight in shining armour for many Malaysians. It provides essential financial support for various needs. One of the primary uses of EPF Account 2 is to help finance the first house purchase. In this article, we will focus specifically on EPF Account 2 withdrawals for house and the types available.

Types, Requirements, and Other Info About EPF Housing Withdrawals

Let’s delve into the types of EPF Account 2 withdrawals for house so that can make homeownership a reality, along with other important details you should note. There are currently six types of EPF housing withdrawals available in Malaysia.

1. Buy House

EPF Account 2 withdrawals for house purchases are fundamental for housing purposes, covering the required 10 percent down payment for your first home. This allows first-time homebuyers to use their EPF savings to secure their new property. Here are the requirements to do EPF housing withdrawals for developer units, subsale units, and auction units:

• Malaysians and Non-Malaysians;
• Below 55 years of age;
• RM500 minimum balance in Akaun Sejahtera;
• Purchasing a residential house (only for developer units and subsale units). However, for auction units, the residential house must have already been bought or built;
• Approved loan from recognized lenders, or self-financed;
• Have never made a housing withdrawal, or have made a housing withdrawal but have sold or disposed of the property.

For this type of EPF housing withdrawals, here is what you can withdraw:

For example, if the housing loan is under your name alone (Individual Withdrawal), and the house you are buying costs RM100,000 with an approved loan amount of RM80,000. You can withdraw RM30,000 from your Akaun Sejahtera, or any balance in the account, whichever is lower.

2. Build House

EPF housing withdrawals can also be used to finance the cost of building a house on purchased land or on your own land. For your own land, it can be land owned by you or your spouse, FELDA land, land from a recognized government agency, or longhouses in Sabah and Sarawak. Here are the requirements for ‘with land purchase’ and ‘on own land’:

• Malaysians and Non-Malaysians;
• Below 55 years of age;
• Minimum balance of RM500 in Akaun Sejahtera;
• You or your spouse is purchasing land and building a house (only applicable for ‘with land purchase’);
• Approved loan from recognized lenders, or self-financed;
• Never made a housing withdrawal or have made a housing withdrawal before but have sold or disposed of the property;
• Construction agreement is dated less than three (3) years from the date of withdrawal application;
• You have built a house on land owned by you or your spouse; OR
• Your spouse has built a house on land owned by you; OR
• You have built a house on FELDA land or recognized government agency land; OR
• You have built a longhouse for Sabah & Sarawak (only applicable for ‘on own land’).

The table below shows the amount that can be withdrawn from your EPF Account 2 under the build house housing withdrawal:

3. EPF Account 2 Withdrawals for House: Reduce or Redeem Housing Loan

For this category, you can use the savings in your Akaun Sejahtera to reduce or redeem the outstanding amount of your housing loan or your spouse’s housing loan balance. The requirements are as follows:

• Malaysians and Non-Malaysians;
• Below 55 years of age;
• At least RM500 in Akaun Sejahtera;
• Bought or built first or second residential house;
• Registered owner of the property (for individual withdrawal only);
• Residential house has been charged as collateral;
• Have an outstanding housing loan with loan providers recognized by the EPF;
• Approved loan from recognized borrowers;
• For joint withdrawal to assist spouse, the house must be fully owned by the spouse, or jointly owned by the member and spouse;
• Applicant’s spouse is a borrower of the housing loan.

Next, let’s see the amount that you can withdraw:

4. Housing Loan Monthly Installment

Other than that, you can also withdraw from EPF Account 2 to pay your housing loan monthly installment. This helps you reduce or settle your housing loan balance and pay your monthly housing loan at the same time.

This withdrawal is only applicable for individual buyers (the buyer must also be the borrower). Once your application is accepted, the withdrawn amount will be transferred to a separate account for monthly loan installments.

Meanwhile, the dividend will be credited to your Akaun Sejahtera after the annual dividend has been declared. Here are the requirements:

• Malaysians and Non-Malaysians (with PR status or registered as EPF members before 1 August 1998);
• Below 55 years of age upon application;
• Minimum balance of RM600 in Akaun Sejahtera;
• Bought or built a residential house;
• Have remaining housing loan monthly instalments with loan providers recognized by the EPF;
• Started paying monthly loan instalments;

If you are eligible, you can withdraw the total amount of your housing loan balance, or your entire savings in your Akaun Sejahtera, depending on whichever amount is lower. The withdrawal must be for a minimum of RM100 monthly payment for a period of six months.

For subsequent withdrawals, applications can be made 30 days in advance before the expiry date of your monthly installment payment.

5. Flexible Housing

Your current and future EPF savings can also influence your eligibility level for a housing loan. This is because the financial institution where you apply for your housing loan will consider your monthly EPF contribution as your income.

Consequently, the financial institution will gauge your loan eligibility according to the value of contributions in your EPF Akaun Sejahtera. As a result, the higher your loan eligibility, the better your chances of getting the home of your dreams. To do this EPF housing withdrawal, here are the requirements:

• Malaysians and Permanent Residents (PR);
• Below 54 years of age;
• Purchased or built a residential house;
• Have a housing loan with financial institutions approved by the EPF.

Below are the procedure to apply for flexible EPF housing withdrawal:

1. Get verification from the financial institution on loan details, house purchase/building, and ring-fencing;
2. Send in your application and the required documents through the financial institution;
3. Flexible Housing Withdrawal must be applied for together with Buy/Build House Withdrawal OR Reduce/Redeem Housing Loan Withdrawal.

6. EPF Housing Withdrawals: PR1MA Housing

Lastly, EPF Account 2 withdrawals for house is dedicated to those who are planning to purchase a house under the Malaysia People’s Housing Programme (PR1MA). Here are the requirements:

• Malaysians;
• Below 55 years of age;
• PR1MA house buyer;
• Applicants of housing loan through the Skim Pembiayaan Fleksibel PR1MA (SPEF);
• EPF members who have never made any Housing Withdrawal, or have made a Housing Withdrawal but have disposed of the property

Below is the step-by-step guideline to apply for PR1MA housing withdrawal:

1. Register an account at www.pr1ma.my and apply for the PR1MA housing project of your choice;
2. Wait for the offer letter of purchase and apply for a loan from a financial institution;
3. Submit your applications for:
   • Withdrawal restriction (ring-fence);
   • PR1MA Housing Withdrawal;
   • Restructuring;
   • Cancellation of withdrawal restriction (ring-fence).
4. The financial institution will verify and forward your application to the EPF;
5. You will receive notification from KWSP once your withdrawal has been approved (via SMS/i-Akaun Security Message/Notice).

Under the PR1MA housing withdrawal, eligible applicants should note that this withdrawal is strictly for the financing of PR1MA houses. Payment will be made directly to the financial institution. Additionally, other pre-retirement withdrawals under Akaun Sejahtera will be restricted until applicants reach the age of 55 years old.

There are four EPF PR1MA panel banks to be referred to as the payment will be directly credited into the PR1MA House Loan account. The banks are AmBank, CIMB, RHB, and Maybank.

EPF Account 2 Withdrawals for House: Let’s Turn Your Dream Into Reality

Now, you can choose the appropriate type of EPF housing withdrawals to help make your dream of owning your first home a reality. If none of these options suit you yet, you can start planning and saving more to achieve homeownership in the future. In addition to EPF savings, consider enhancing your future protection by obtaining the best health insurance from Qoala.

Qoala is Malaysia’s leading insurance comparison and renewal platform, offering comprehensive personal protection insurance policies at guaranteed affordable prices. Visit Qoala’s website for more information about health insurance in Malaysia.