Partial Withdrawal of Severance Pay for Housing in Colombia: Requirements, Documents, and 2026 Procedures

How to Access Your Employment Savings for Housing Without Ending Your Contract

Many formal workers in Colombia are unaware that they do not need to resign or wait until they are unemployed to access the capital saved in their severance fund (cesantías). If you are thinking about buying a home, building on your own lot, making home improvements, paying down your mortgage principal, or paying property taxes, Colombian labor law allows you to perform a partial withdrawal of severance in a 100% legal and direct way.

Unlike employment liquidation upon contract termination, a partial withdrawal while the employment relationship is active requires justifying the exact use of the funds. At Colombia Move, we have prepared this practical guide so you can learn the documentation requirements, the maximum disbursement deadline mandated for AFPs, and the exact model of the authorization letter your employer must issue to avoid reprocessing.

According to the active listings on Colombia Move (August 2026), there are 41 apartment ads and 14 house ads, plus 44 for furniture; those remodeling with severance funds often cross-reference these lists for supplies and appliances.

2026 Legal Framework: Worker Rights and Disbursement Terms

The partial withdrawal of severance for housing is covered by Article 256 of the Substantive Labor Code and Article 102 of Law 50 of 1990, regulations detailed by Decree 1072 of 2015 and Decree 1562 of 2019 from the Ministry of Labor.

It is key that you know the two golden rules that guarantee the agility of this administrative process in 2026:

• Employer responsibility (Decree 1562 of 2019): The company or employer has the legal obligation to verify and confirm that the supporting documents presented by the worker are genuine and correspond to one of the housing-related reasons authorized by law before issuing the authorization.
• Mandatory 5-business-day payment term: In accordance with Article 21 of Law 1429 of 2010 and Paragraph 2 of Decree 1562 of 2019, the Pension and Severance Fund Administrator (Porvenir, Protección, Colfondos, Skandia, or the Fondo Nacional del Ahorro - FNA) or the employer itself has a maximum deadline of five (5) business days to effect the payment once the request with full documentation has been filed.

Authorized Uses for Partial Severance Withdrawal

Colombian regulations strictly limit the use of severance funds in the real estate sector to protect the worker's savings. The approved cases for the partial release of these resources are as follows:

1. Acquisition of housing or a lot: Purchase of a house, apartment, off-plan project, or urban/rural land.
2. Housing construction: Building on a lot or terrace owned by the worker or their spouse / permanent partner.
3. Remodeling, expansion, or repair: Improvement works, changing floors, minor repairs, painting, waterproofing, or finishes.
4. Amortization or release of mortgage liens: Partial or total payment of the balance of a housing loan or housing lease.
5. Payment of property tax (impuesto predial): Payment of the unified property tax bill corresponding to the residence property.

Important note: The law allows using severance funds for real estate exclusively owned by the worker or shared with their spouse or permanent partner. To validate this basis, you must attach the civil marriage certificate or the extra-judicial declaration proving continuous cohabitation of no less than two (2) years.

Documents Required According to Application Type

To prevent the Human Resources department or the severance fund from returning your request, ensure you attach the complete file according to your specific case:

1. For Housing or Lot Purchase

• Copy of the worker's identity document enlarged to 150%.
• Promise of sale agreement for the property, signed by both parties.
• Copy of the property's Certificate of Tradition and Freedom.

2. For Remodeling, Repair, or Housing Improvement

• Authorization letter issued by the employer on letterhead.
• Copy of the property's Certificate of Tradition and Freedom, with an issue date no older than thirty (30) calendar days at the time of submitting the application.
• Civil work contract signed with the foreman, contractor, or responsible company.
• Detailed quote or budget for labor and materials.
• If the remodeling involves major structural modifications, the law requires having the construction license for remodeling approved by the Urban Curator..

3. For Mortgage Loan Payment or Property Tax

• Recent bank statement from the financial institution showing the mortgage debt balance and the loan number.
• Current invoice for the unified property tax issued by the local mayor's office or the corresponding treasury department.

Structure and Template of the Employer's Authorization Letter

The most critical document in the process is the letter issued by your company or employer. If the letter omits the required legal citations, the AFP will automatically reject the transfer of your funds. The communication must be written on letterhead signed by the legal representative or the Human Resources director and include:

• Full name of the worker and ID (cédula) number.
• Exact amount or value in pesos (COP) that the employer authorizes to be withdrawn.
• Specific purpose of the funds (e.g., "Remodeling and painting of primary residence").
• Complete address and real estate registration number (matrícula inmobiliaria) of the property.
• Explicit citation of regulatory compliance: "The employer undertakes to verify that the worker uses the accumulated funds for the purposes provided in Article 256 of the Substantive Labor Code, in accordance with Decree 1562 of 2019 and Article 21 of Law 1429 of 2010".

Step-by-Step for the Digital Process with AFPs

Nowadays, the Severance Fund Administrators (Porvenir, Protección, Colfondos, Skandia, and FNA) allow you to submit your request 100% online without waiting in lines:

1. Internal approval: Submit your project documents (quotes, Certificate of Tradition, and work contract) to your company's Human Resources department to get the signed letter.
2. Registration on the web portal: Log in to your AFP's virtual branch using your affiliate username and password.
3. Uploading documents: Select the "Partial Withdrawal of Severance for Housing" option, and attach in PDF format the employer's letter, your ID, the Certificate of Tradition and Freedom (<30 days old), and the contracts or quotes.
4. Bank account registration: Register an active bank account (savings or checking) in your own name to receive the electronic transfer securely.
5. Disbursement: After the files are validated, the AFP will transfer the funds to your account within the statutory 5 business days.

Security Alert: Zero Tolerance for Illegal Facilitators

The process for partial severance withdrawal from AFPs and the National Savings Fund is completely free of charge. On the internet and social media, offers abound from "facilitators" who promise to obtain your severance funds in exchange for commissions ranging from 10% to 20%, or by creating fake work contracts or sales promises.

Engaging in this practice constitutes a criminal offense of forgery of a private document and fraud. Additionally, Paragraph 1 of Decree 1562 of 2019 authorizes employers and funds to audit the construction works, so the falsification of supporting documents can lead to the employee's dismissal for just cause and legal action before the Office of the Attorney General of the Nation.

Frequently Asked Questions

❓ How long does it take for the severance fund to disburse the money for housing?

The fund or the employer has five (5) business days to pay after the request is complete. This deadline is set by Decree 1562 of 2019, consulted on August 29, 2026, at Función Pública; Human Resources may take a few extra days before signing.

❓ Can I withdraw my severance funds to remodel a house in my spouse's name?

Yes: it applies to housing owned by you, your spouse, or your permanent partner. Attach a civil registry or a declaration of cohabitation of at least two years, according to MinJusticia (consulted on August 29, 2026); it does not cover parents or siblings.

❓ What mandatory information must the employer's authorization letter contain?

It must be on letterhead paper, with name, ID, amount, purpose, and the citation of Article 21 of Law 1429 of 2010. That citation is what AFPs require; Función Pública (August 29, 2026) supports the associated disbursement deadline.

❓ What is the maximum validity of the Certificate of Tradition and Freedom for the process?

It cannot be more than thirty (30) calendar days old at the time of submission. This is required by MinJusticia/LegalApp (consulted on August 29, 2026); if it expires, request a new one at the Registry Office.

❓ What documents must I present to request the withdrawal of severance funds to repair my home?

Employer's letter, a certificate less than 30 days old, work contract, and material quote. That package is detailed by Mintrabajo (concept 02EE2022410600000012877, consulted on August 29, 2026) for repair or improvement.

❓ Does the partial severance withdrawal process have any cost?

No: the process with AFPs is free and does not require facilitators. Commissions of 10% to 20% or fake contracts are fraud, according to operators like Porvenir (consulted on August 29, 2026) and Decree 1562.