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Presented By Ritesh Prajapati (82) Vijay Raiyani (88)

Flow of Presentation

What is housing? What is home loan? Model of housing projects Housing finance assistance-factors Evolution of housing finance Profile of NHBs Why housing finance is important ? Process of housing loan Eligibility criteria for home loan Housing loan documents

What is housing ?
Housing Means the houses or conditions that people live in
Housing Association Housing Estate Housing projects

What is home loan?

The home loan is a loan taken by borrower from the issued against the property/Security intended to be bought on the part by the borrower giving a condition ownership over the property. A set of all financial arrangements that are made available by Housing Finance Companies (HFCs) to meet the requirement of housing is called Housing loan.

Model of housing projects

Town Planning Schemes
Development Authority Project Housing board project Cooperative society project Private real Estate Developers Public private partnership Slum boards projects Government employee housing Government programmes

Housing finance assistance-factors

Loan Amount
Time Administrative and processing cost Prepayment charges Fixed And Floating Rates Value addition Sources of finance

EMI Calculation methods

Monthly rest system Annually rest system

Evolution of housing finance

In 1970 HUDCO established to finance housing and infrastructure.
Emergence of HDFC in 1977 as a first housing financing co. in the private

sector in India.
NHB was established in 1988 under NHB Act in 1987 as an under apex


Profile of NHB
Establish in 9th July 1988 under NHB act 1987
Headquarter in Delhi 9 departments which include NHB RESIDEX cell, regulation & supervision, refinancing operation, direct

finance operation, enabling processes, information technology, resource mobilization. NHB also raised resources for the housing sector towards increasing new housing stock and provides refinancing to a large set of retail lending institution. These include scheduled commercial banks, scheduled state cooperative banks, scheduled urban cooperative banks.

Why Housing finance is important ?

Housing markets have significant forward linkages with financial markets.
It is routinely monitored as an important leading indicator of overall

macroeconomic activity.
This sector has a tremendous development impact in terms of providing

social stability & economic development.

Process of housing loan

Step 1 : Application form Step 2 : Personal Discussion Step 3 : Bank's Field Investigation Step 4 : Credit appraisal by the bank and loan sanction Step 5 : Offer Letter Step 6 : Submission of legal documents & legal check Step 7 : Technical / Valuation check Step 8 : Registration of property documents Step 9 : Signing of agreements and submitting post-dated Step 10 : Disbursement

Interest Rate
Name of Bank Indian Bank Bank of Baroda Tenure of Loan/Amount of Loan Upto Rs. 75 Lakhs Above Rs. 75 Lakhs Upto Rs. 30 Lakhs Above Rs. 30 Lakhs Upto Rs. 75 Lakhs & Above Rs. 75 Lakhs Upto Rs. 75 Lakhs Above Rs. 75 Lakhs Upto Rs. 75 Lakhs Above Rs. 75 Lakhs Upto Rs. 75 Lakhs Above Rs.75 Lakhs & upto Rs. 3 Crore Upto Rs. 30 Lakhs Above Rs. 30 Lakhs Upto Rs. 30 Lakhs Above Rs. 30 Lakhs Above Rs. 25 Lakhs & upto Rs. 50 Lakhs Above Rs. 50 Lakhs Upto Rs. 25 Lakhs Above Rs. 25 Lakhs & upto Rs. 75 Lakhs Above Rs. 75 lakhs & upto Rs. 150 Lakhs Punjab and Sind Bank Upto Rs. 30 lakhs Above Rs. 30 Lakhs & upto Rs. 75 lakhs Above Rs. 75 lakhs Upto Rs. 25 lakhs Rate of Interest 10.20% 10.45% 10.25% 10.25% 10.25% 10.25% 10.50% 10.25% 10.50% 10.25% 10.75% 10.30% 10.50% 10.45% 10.70% 10.50% 10.75% 10.50% 10.55% 10.80% 10.50% 10.75% 11.00% 11.00%

Central Bank of India Dena Bank Oriental Bank Of Commerce State Bank of India State Bank of Hyderabad Corporation Bank United Bank of India

State Bank of Mysore

Eligibility Criteria for home loan

Age 21 to 65 years. Repayment maximum 20 years. 80% of cost of construction OR 80% of Registration value for outright

purchase as loan Purchase of House: Age of independent house should not be more than 25 years. Age of the flat should not be more than 20 years. Loan upto and inclusive of Rs. 20 Lakhs treated as priority sector

Salaried Persons
Maximum 48 times monthly gross income or 75% of cost of

construction whichever is less Latest salary certificate and 3 years IT returns Certificate from the employer regarding leftover service Estimates and other related approved documents Subject to 30% take home pay.

Housing Loans for Agriculturists, Business &

Self-employed persons
For Agriculturists, four times of gross annual income as per certificate

issued by the competent Revenue Authority, supported by evidence of land holdings 4 times the gross annual income (48 times of monthly income) Income Tax Returns Auditor Certificate Estimates and other related approved documents

Income proof
Employees Last pay certificate, Form 16 issued by the employer/ IT Returns/ Assessment orders Agriculturist Income Certificate by competent Revenue Authority in respect of income from agricultural and allied activities Prof. & self employed Income proof for the last 3 years supported by financial statements signed by Chartered income tax returns /assessment orders

Property statements of applicants and coobligant. Location sketch of the proposed house/flat. Maximum area-wise quantum of loan for acquisition or construction of new

dwelling units is - rural - 25 lacs, semi-urban 75 lacs, Urban 150 lacs and Metro 250 lacs.

In case of purchase
Agreement for sale between vendor and purchaser Name and address of the vendor and purchaser

Copies of prior documents of title to the property in possession of the

vendor along with tax receipts Authorization letter to receive original title deeds on registration from Registrar of Assurances. Receipt of delivery issued by Registrar of Assurance to deliver the original title deeds. Original receipts for the payment to builder/vendor. Copy of the approved plan and a letter from the vendor about the age of the house/flat. Certificate from the Approved Engineer about the present value, condition and life of the house/flat. Original deed of conveyance of land, conveying the individual / proportionate share of land along with agreement for construction. Lay out approval plan

In case of construction
Copy of the approved plan. Detailed estimate of construction. Allotment letter of the house / flat issued by the Housing Board. Original title deeds of the sight Development Agreement between the owner of the site and builder. Nil Encumbrance Certificate Any other document stipulated by Legal Advisor / sanctioning authority

Pre-Payment Charges
1) No prepayment charges, if the housing loan borrower makes payment from own savings / windfall gains for which documentary evidence is produced by the borrower. 2) 2% flat prepayment charges on prepaid amount if the borrower makes payment by borrowing funds from other sources. 3) 2% flat prepayment charges on prepaid amount if the borrower makes payment by take over by other banks / financial institutions 4) NO pre-payment charges for all housing loans with floating interest rates, new and existing

Housing Loan Documents

Pre sanction inspection report, duly singed by the borrower and

bank. Credit opinion report from existing banks CIBIL report generate and analysis Computation of eligibility
1) 2) 3) 4) 5) 6) 7) 8) 9) 10)

Application Appraisal Valuation report Affidavit Search report for 13 years N.O.C. from RHB/UIT/RIICO Arrangement letter/sanction letter Housing loan agreement Certificate of document execution Letter of guarantee of housing loan

11) Authorization latter to receive the sale deed from registrar office 12) Mortgage deed to be executed by borrower with SRO 13) Agreement to mortgage, wherever a mortgage cannot be created 14) 15) 16) 17) 18) 19) 20) 21)

23) 24)


immediately Undertaking where finance is granted for purchase of a plot only Letter of pledge Certificate of branch manager Branch manager certificate- inspection report Details of assets and liabilities Inters rate clause letter declaration assets & liability Opinion report on borrower as well guarantor CIBIL borrower / guarantor Standing instruction Revival letter / balance confirmation Insurance of collateral securities for mortgage property / machines/ stocks Compliance certificate

26) Affidavit property 27) Creation of equality mortgage letter 28) Letter from member of joint family & owner 29) Mortgage letter for equitable Mortgage 30) Insurance of immovable property / house full value 31) Declaration 32) Broken period E C 33) Undertaking 34) Equitable Mortgage charges Rs 500/- per lacs 35) PDC in case of all term loans including PER/SBF/SSI/C&I. 36) Processing fees as per circular Rs. 500/- per lacs 37) Post sanction inspection report, duly singed by the bank

38) Control return sent to controlling authority

Credit Information Bureau (India) Limited or CIBIL is a Credit Information

Company (CIC) founded in August 2000.

Post Inception, They have come to play a critical role in Indias financial

Whether it is to help loan providers manage their business or help

consumers secure credit faster and at better terms, the use of CIBILs products have led to a massive change in the way the credit life cycle is managed by both loan providers and consumers. These records are submitted to CIBIL by banks and other lenders, on a monthly basis. These records are submitted to CIBIL by banks and other lenders, on a monthly basis


Saving bank account to be opened invariably by every borrower duly complying KYC norms Application (CIBIL REPORT) Passport size photo

1] Proof of identity A) Voter card/passport/ driving license/pan card 2] Proof of resident

A) Recent telephone bill/electricity/ property tax receipt B) Passport / voter ID card

Proof of business address from non-salaried individuals Agreement of sale/ sale deed Statement of bank account Latter of allotment from housing board / society etc. Copy of approval Permission for construction Latest city survey Latest index-II All original link documents Estimate / valuation report Age of building shell is certificate by the velar. Search report/non encumbrance certificate for 13 year for advocate Declaration of assets & liabilities Declaration of legal hairs.


1. 2.

4. 5. 6.

8. 9. 10.

12. 13.

Sale deed/ registered mortgage deed Agreement to sale Agreement to mortgage Ordinal payment receipts Our name on index II Insurance Noting charge/ marketing lien on records of society/ builder NOC from builder / society Photograph Share certificate Original title deeds Possession latter Allotment letter