Even some property agents are either confused or unaware of the rules on how much money we could use from CPF to pay for our HDB mortgage loans. Some thought that this only applies to bank loans but not HDB loans. This is false. Most of the time, property agents won't even advise you on such matters even if they know about the rules.
The following is taken from an article at this blog.
It basically explains the restrictions and mechanism of CPF limits on usage for mortgage payment:
Property Valuation Limit and CPF Withdrawal Limit
ONCE AGAIN, REMINDER: PLEASE THINK THRICE BEFORE BUYING A RESALE FLAT!
It is always more prudent to go for a BTO or new HDB flat if you are a young couple buying your first flat. This will allow you to accumulate more buying power or prevent you from over-committing yourself. For BTO or new HDB flat mortgage, the Property Valuation Limit and CPF Withdrawal Limit will not be applicable and you could safely use your CPF money to pay all the mortgage for this flat. This will allow you to have certainty in your financial planning.
Goh Meng Seng