Target Group:

Permanent salaried employees, Professionals & Self-Employed Persons, Businessmen, having regular income to liquidate the loans.

Purpose:

1. For construction of residential house on land already owned.
     
2. For purchase of plot by salaried persons from Govt Agency/ Development Authority or any Government recognised agency (VIZ: HUDA, HOUSEFED) and construction of residential house thereon. However, maximum loan for purchase of plot (where loan for plot is to be sanctioned) will be 85% of the cost of land or 40% of the permissible amount of total loan.
    
3. For purchase of house/ flat to be used for residential purpose.
    
4. For renovation / extension /Repair of residential house already owned.
    
5. For purchase of Unfinished/old house (maximum 20 year old) and renovation/extension/ repair of the same.
    
6. For taking over of housing loans from other finance companies/ financial institutions.

(Stamp duty and registration charges, as applicable may also be included in the borrower's project cost so as to enable him / her to avail of Bank finance against the same)

Eligibility:

Housing Loan may be sanctioned to those who have regular income sufficient enough to liquidate the loan alongwith interest within stipulated period of repayment.The employees who have availed of housing loan from their own organisations may also avail of loan from the Bank under this scheme if they are having regular income sufficient to liquidate the loan within the stipulated period and are able to comply with other stipulations of the scheme.

However, special facility is also available as under

1. Repayment Option for salaried persons desirous to extend the repayment period beyond the date of retirement under Public Housing Loan Scheme of the Bank will be eligible upto 5 years after the date of retirement.
    
2. Availability of Progressive monthly installments (PMI) options under public housing loan scheme.

Nature of Loan: Term Loan

Loan amount:

1. In case of salaried persons: The loan amount will be restricted to 60 times of monthly gross salary last drawn subject to the condition that it is within the project cost less stipulated margin and Total deductions including EMI of proposed loan should not exceed 40% of the Gross monthly salary of the applicant.
2. In case of others: The loan will be restricted up to 4 times of gross Income average shown in last 3 years Income Tax Assessment Order/ acknowledged copy of income tax return subject to the condition that it is within the project cost less stipulated margin and Total deductions including EMI of proposed loan should not exceed 40% of the Gross monthly income of the applicant as per IT Returns.

   Income Tax returns will be got verified by engaging services of Chartered Accountant.

   For repairing/furnishing of house/flat: Maximum loan for Repairing/ Furnishing of existing House/ Flats will be 75% of the estimated expenses or Rs 3, 00,000 which ever is low subject to the condition that borrower has sufficient repaying capacity as per income criteria given hereunder: The minimum take home monthly salary/income taking into account all deductions (including EMI of proposed loan) should not be less than 40% of last month's gross salary in case of salaried persons & 50 % of average gross monthly income as per average of last three years IT Return in case of others.

   4.3 For application money raised by Housing Boards/ Development Authorities: Permissible Loan amount for Application Money raised by local Housing Boards/ Development Authorities will be 75% of application amount or Rs 3,50,000/- which ever is lower subject to the condition that the borrower has capacity to repay the loan within stipulated repayment period.

   4.4. For Joint Borrowers: While computing repaying capacity in case of joint borrowers*, income of all borrowers may be clubbed. Joint borrowers may be the co-owner of the property or they may not be co owner (but must be legal heirs of owner of the property / PF nominee / Spouse having future interest in the property) but their income is to be considered as one of the source of loan repayment. (*However, Income of Co- borrower / (s) will be clubbed only if source of income of co-borrower is salary and co-borrower / (s) is a permanent employees of Government / Semi Government / Public Sector Unit/ Multinational Corporate Houses/ Blue Chip Companies / reputed companies.)

Note: Income Tax return must be obtained in all cases including salaried persons.

Margin:

• 15% of project cost in case of salaried person
   
• 25 % of project cost for others and
   
• in case of repairing / furnishing 25% in all categories (including salaried class)

Project cost will consist of -

• Purchase price of land/ house/ Flat, plus
   
• Cost of construction/ renovation/ extension (if applicable) plus
   
• Stamp duty and registrations charges, as applicable plus Accrued Interest amount of moratorium period, if proposed to be capitalized
   
• It will be ensured that margin at all stages has been contributed by the borrower upfront where disbursement is to be made in phases.

Rate of interest

Floating:- (PLR=13.00%)

Fixed rate of interest will be subject to following conditions:

• Subject to "interest rate reset" clause in terms of which fixed rates may be reset at the end of every three years on the basis of interest rate prevailing at that time.

• Subject to "force maejure" clause in terms of which Bank is authorized to revise fixed interest suitably and prospectively in the event of major volatility in interest rates.

• Borrower of housing loan may exercise the option to switch over at any point of time from floating to fixed or vice versa on the condition that borrower has to pay as under:

From Fixed to Floating- 2% of outstanding balance for exercising the option
From Floating to fixed- 0.50% of outstanding balance for exercising the option
 

Security:

1. Primary:

   1. Equitable/ Registered mortgage of the property or

   2. Pari- passu charge over the property if the borrower (salaried person) has already availed loan from his organisation.
        

2. Collateral Security:

   1. Personal Guarantee of one person of means and standing acceptable to the Bank will be taken in all cases. However, in case of delay in creation of mortgage Personal Guarantee of two person of means and standing will be taken, where delay over 6 months in creation of equitable mortgage of the property to be financed by the Bank is expected. In case of delay in creation of equitable mortgage of the property beyond 6 months, collateral security to the extent of loan amount in the shape of immovable property or financial securities or personal guarantee of two persons of means & standing acceptable to the Bank will be taken. However, the same will not be needed where a property is being purchased from seller/builder as mentioned hereunder:

      • Housing Board/ Development Authority /Govt agency

      • Good rated /reputed housing company / builder/developer well known at national / state level (VIZ: Ansal, Gujarat Ambuja, Bengal Ambuja, Bengal Peerless, Sahara Housing). List of such reputed housing companies/ developers will be circulated by respective Zonal Offices after its careful scrutiny and a copy will be endorsed to Retail Credit Section, Head Office.

      • Approved Housing Societies notified by Zonal Offices.

      • Builders/Developers whose project has been approved by the Bank as per bank's guidelines. (Approval of housing projects for the purpose of tie-up arrangement for loan to their prospective buyers where builder/developer is not seeking finance from the bank for the housing project may now be accorded by the Zonal Head).

Documentation:  In a booklet form complete in all respect.

Processing Fees:  0.50% of loan amount, Maximum Rs. 10,000/-

Documentation Charge:  Actual expenses / charges incurred for creation of mortgage.

Disbursement:

In case of purchase of flat / House payment should be made direct to seller / promoters / societies by DD/ Banker's cheque and should be issued in the name of builders with Bank account number on it. Bank's official should be sent for delivering the cheque / draft to the builders / sellers property at the registered addressed mentioned in the title deed.

In case of construction of new house / flat, loan will be disbursed in a phased manner, in 4 or more installments. Each such installment will be released only after verification of end use of funds already released by the bank.

Repayment Period & Moratorium:

a Repayment Period:-

1. For construction of House &/ or Purchase of House/ Flat/Residential Plot:For salaried Persons-- Maximum 20 years or length of remaining service, whichever is less.For Others -- Maximum 15 years or remaining period in attaining an age of 65, which ever is earlier.
     

2. For Repairing/ Furnishing of House/ Flat:For salaried Persons-- Maximum 7 years or length of remaining service, whichever is less.For Others -- Maximum 7 years or remaining period in attaining an age of 65, which ever is earlier.
     

3. For Application Money raised by Housing Board/ Development Authority:12 Months or receipt of refund order, which ever is earlier.
    

4. Other Norms on Repayment Period:
   Repayment period will be exclusive of moratorium period.
   If the borrower desires to repay the loan in shorter period, he/she may be allowed to do so and monthly installment will be fixed accordingly. Interest will be realised on monthly basis during the moratorium period. However, in case of salaried persons the interest amount may be capitalised (i.e. included in project cost) on request of the borrower.

i) Loan Repayment Options is available.

a) Repayment option for salaried persons desirous to extend the repayment period beyond the date of retirement under Housing Loan Scheme:

• To extend repayment period of housing loan to salaried persons upto 5 years after the date of retirement subject to the condition that EMI will be within 60% of their estimated post retirement monthly earnings (pension plus ascertainable other income such as rental earnings, income from investment in securities/LIP/NSC etc.., if any) as also existing net take home salary after taking all deductions will not be below 40% of gross salary.

• There will also be flexibility to consider some lump sum / bullet payment of full or part of the loan outstanding out of future sources of fund and draw the repayment schedule accordingly.

• If post retirement EMI is more than stipulated norms, pre-retirement EMI may be proportionately increased with borrower's consent.

b) Offering progressive monthly instalments (PMI) options

• Under the plan, the initial monthly instalments for the first 5 years shall be kept lower i.e., 80% of normal EMI and it will gradually go up to 90% of EMI plus whatever shortfall during the first 10 years shall be realized after 10th year of loan. Accordingly, a three-tier repayment schedule will be drawn up.

• Borrowers will have also option for 2 tier repayment structure (with first tier not above one third of repayment period)

• Borrowers may also get higher amount of progressive monthly instalments (PMI) than the above norms by opting higher %of EMI for PMI calculation.

Existing borrower or Bank's employees also can exercise options (a) & (b).

• Minimum 24 PDCs will be obtained before releasing of fund except salary tied-up cases.

Prepayment Penalty

• If liquidated within 1 year: 2% of outstanding balance· If liquidated after 1 year: 1.50% of outstanding in case of takeover.

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