RES exam question on HDB Policies: net cash proceeds after repaying the mortgage and refunding CPF
Mdm Lee sells her HDB resale flat for $620,000. The outstanding HDB mortgage balance is $80,000. She had used CPF OA funds of $170,000 to purchase the flat, and accrued CPF interest totals $32,000. What are Mdm Lee's net cash proceeds after repaying the mortgage and refunding CPF (principal plus accrued interest)?
- A$370,000
- B$338,000
- C$320,000
- D$284,000
Show answer & explanation
Answer
B. $338,000
Explanation
Net cash proceeds = Sale price − outstanding mortgage − CPF refund (principal + accrued interest) = $620,000 − $80,000 − ($170,000 + $32,000) = $620,000 − $80,000 − $202,000 = $338,000. The CPF refund of $202,000 is credited back to Mdm Lee's own CPF OA account (not paid to HDB). If the sale proceeds were insufficient to cover both the mortgage and the full CPF refund, CPF Board may waive the shortfall in a genuine open-market sale.
Study the concept behind this question: HDB Standard, Plus & Prime Flats (the New Classification Framework)
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