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Scheme for Housing Loans
Scheme for Housing Loans
(for purchase of House / Flats / Plots)
i.. | Type of Facility | – | Term Loan
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ii. | Purpose | * | Construction or purchase of new and old dwelling units, (not more than 15 years old) provided it is in a good condition. | |
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| * | . Renovation of existing house/dwelling unit. | |
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| * | Repayment of loan availed from housing Finance companies/banks.
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| * | Purchase of plot to construct a house subject to condition that a house will be constructed there on within a period of 2 years from the date of purchase of plot.
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| Subject to prudential exposure norms. | |
iii. | Eligibility | – | Individual(s)
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iv. | Amount | – | Up to the maximum of Rs. 140.00 Lacs per beneficiary of a dwelling unit. (Loan amount from all sources normally should not exceed 48 times of gross monthly income or 4 time of annual income of the borrower/s). However, housing finance to borrowers availing Loans above ` 35.00 Lacs shall not be treated as Priority Sector Lending.
MCL calculation criteria as defined in the Scheme IPSB LAP will also be applicable for Housing Loan Facility.
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v. | Margin | – | 15% |
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- Interest As per Bank’s Rules
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vii. | Repayment | * | Maximum 20 years depending upon repayment capacity including moratorium reckoned from the date of first disbursement, subject to bank satisfaction
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| * | Moratorium not to exceed 18 months of first disbursement or 1 month after completion of house/flat, whichever is earlier. Interest during this period to be serviced as and when debited.
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| * | Equated monthly instalments may be offered.
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viii. | Security Documentation | a) | All usual loan documents as per Bank’s Rules.
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| b) | Mortgage of freehold house/flat constructed/ purchased out of loan |
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| OR |
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| Bank may also accept security of adequate value in the form of LIC policies, NSCs, etc.
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ix. | Surety/ies |
| One or two sureties of good means as per bank’s discretion.
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Other Conditions:
In case of finance of old house, a certificate from Bank’s approved architect/engineer certifying that the condition of the house/flat is good enough and the expected life of the house/flat is more than the repayment period stipulated for the loan, be obtained.
- Person(s) who already owns a house is also eligible for housing loan for construction/buying a second house/flat for the purpose of self occupation.
- Person who has been provided accommodation by his/her employers is also eligible for loan under the scheme, even though he/she is not in a position for its occupation in the near future and proposes to let out on rental basis.
The repayment schedule should be fixed in a realistic manner taking into account the repayment capacity of the beneficiary which should normally be around 60% of his income. However, higher repayment amount at the request of the beneficiary and/or after taking into consideration the family income consisting of spouse, children and parents residing in the house may be Fixed/considered. - Request for additional finance for carrying out alterations/additions/ repairs to the house/flat already financed may be considered within the overall ceiling. In the case of individuals who might have raised funds for construction acquisition of the accommodation from other sources and need supplementary finance, credit facility may be considered after obtaining pari-passu or second mortgage charge over the property mortgaged in favour of other lenders and/or against such other security as may deem appropriate.Estimates and valuation to be done by any registered valuer or architect or civil engineer at following 3 stages:
- a) Initial estimate at the time of sanction
- b) Construction while in progress (once)
- c) Final Valuation
Physical inspection of the house/flat, to be financed by the Bank, shall be carried out by Bank’s officials so as to satisfy itself about reasonableness of the cost/value.
Housing Loan for building construction:
In cases where the applicant owns a plot/land and approaches the bank for a credit facility to construct a house, a copy of the sanctioned plan by competent authority in the name of a person applying for such credit facility must be obtained before sanctioning the home loan. However, submission of sanctioned Master Plan for the Housing Loan for construction of Farm Houses etc. on the Agricultural Land not to be insisted upon.
An affidavit-cum-undertaking must be obtained from the person applying for such credit facility that he shall not violate the sanctioned plan, construction shall be strictly as per the sanctioned plan and it shall be the sole responsibility of the executant to obtain completion certificate within 3 months of completion of construction, failing which the bank shall have the power and the authority to recall the entire loan with interest, costs and other usual bank charges.
An Architect appointed by the bank must also certify at various stages of construction of building that the construction of the building is strictly as per sanctioned plan and shall also certify at a particular point of time that the completion certificate of the building issued by the competent authority has been obtained.
Housing Loan for purchase of constructed property/built up property:
In cases where the applicant approaches the bank for a credit facility to purchase a built up house/flat, it should be mandatory for him to declare by way of an affidavit-cum-undertaking that the built up property has been constructed as per the sanctioned plan and/or building bye-laws and as far as possible has a completion certificate also.
An Architect appointed by the bank must also certify before disbursement of the loan that the built up property is strictly as per sanctioned plan and/or building bye-laws.
No loan should be given in respect of those properties which fall in the category of unauthorized colonies unless and until they have been regularized and development and other charges paid.
No loan to be given in respect of properties meant for residential use but which the applicant intends to use for commercial purposes and declares so while applying for loan.