Buying Property with an LPPSA Loan

The public sector housing loan is the main financing route for government employees. Legal fees and stamp duty follow the same statutory rules, but the documentation route and the way funds are released differ from a bank loan.

What differs from a bank loan

• Approval sequence. The application goes through its own approval process with specific document requirements.
• Document format. Documents have to be prepared in the prescribed format. Deviations cause them to be returned.
• Timing of release. The release schedule follows an internal process, so the completion date has to be planned around it.
• The charge. The lender’s interest still has to be protected and registered against the title.

The costs involved

Legal fees and stamp duty follow the same statutory scales as any other purchase.

What most often causes delay

• Incomplete documents or documents not in the required format
• Property particulars on the documents not matching the title
• A restriction in interest on the title that has not been resolved
• The seller still has a charge that must be discharged at the same time
• A completion date in the sale and purchase agreement too tight for the release schedule

Negotiate a realistic completion period

This is the most practical advice for an LPPSA buyer. If the completion period is set too short, you may have to ask for an extension and carry late interest even though the delay is not your fault. Discuss a reasonable period while negotiating the agreement, not after it is signed.

Subsale or developer purchase

Both can be financed, but the supporting documents differ. A subsale requires a title search and confirmation of the existing property’s status. A developer purchase follows the standard agreement with staged payments.

Frequently asked questions