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Key budget announcements relevant for the housing sector are as follows. Source: NHB
Proposal Implications
1. The existing scheme of interest subvention of 1% on housing loans has been liberalized by extending it to housing loans upto 15 lakh where the cost of the house does not exceed 25 lakh from the previous limit of 10 lakh and 20 lakh respectively.
The proposal is expected to improve affordability levels and generate increased demand for housing loans particularly from LIG and MIG segments. The proposal will encourage the State and/or Private sector agencies to undertake construction of houses/flats within the cost range of upto 25 lakh, which will cater to the needs of a vast section of the population.
2. On account of increase in prices of residential properties in urban areas, it has been proposed to enhance the existing housing loan limit from 20 lakh to 25 lakh for dwelling units under priority sector lending.
The proposal will encourage lending by Banks to the Housing Sector to meet their overall target of 40per cent lending to priority sector. As a result, banks lending in this segment will witness significant increase in the coming years due to increased demand for housing loans in this segment.
3. To boost rural housing by providing housing finance to targeted groups in rural areas at competitive rates, the budget proposes to enhance the provision under Rural Housing Fund (RHF) to 3000 crore from the existing 2000 crore.
The proposal will encourage the provision of Housing Finance to target sections in rural areas, thereby contributing towards mitigating the housing shortage in rural areas.
4. To prevent frauds in loan cases involving multiple lending from different banks on the same immovable property, the Government has facilitated setting up of Central Electronic Registry under the SARFAESI Act, 2002. This Registry has become operational on March 31, 2011.
The Registry will help in creation of a centralized data base of all immovable properties and will enable prevention of frauds in housing loan cases involving multiple lending from banks/HFIs on the same immovable property. This will constitute an important step in developing the market infrastructure.
Housing Schemes in Kerala
(i) Bhavanashree: This scheme is the Housing Micro-finance wing of Kudumbashree.
This scheme is primarily aimed at providing micro finance to Self Help Group (SHG) members for construction of new houses as well as for repairs to existing houses. The loan amount under this scheme ranges from 30,000 - 50,000 to be disbursed in stages.
(ii) EMS Housing Scheme: The main objective of this scheme is to provide house sites with a house to the landless poor and a house to every homeless poor family. The program is implemented through village panchayats, municipalities and corporations.
Proposal Implications
1. The existing scheme of interest subvention of 1% on housing loans has been liberalized by extending it to housing loans upto 15 lakh where the cost of the house does not exceed 25 lakh from the previous limit of 10 lakh and 20 lakh respectively.
The proposal is expected to improve affordability levels and generate increased demand for housing loans particularly from LIG and MIG segments. The proposal will encourage the State and/or Private sector agencies to undertake construction of houses/flats within the cost range of upto 25 lakh, which will cater to the needs of a vast section of the population.
2. On account of increase in prices of residential properties in urban areas, it has been proposed to enhance the existing housing loan limit from 20 lakh to 25 lakh for dwelling units under priority sector lending.
The proposal will encourage lending by Banks to the Housing Sector to meet their overall target of 40per cent lending to priority sector. As a result, banks lending in this segment will witness significant increase in the coming years due to increased demand for housing loans in this segment.
3. To boost rural housing by providing housing finance to targeted groups in rural areas at competitive rates, the budget proposes to enhance the provision under Rural Housing Fund (RHF) to 3000 crore from the existing 2000 crore.
The proposal will encourage the provision of Housing Finance to target sections in rural areas, thereby contributing towards mitigating the housing shortage in rural areas.
4. To prevent frauds in loan cases involving multiple lending from different banks on the same immovable property, the Government has facilitated setting up of Central Electronic Registry under the SARFAESI Act, 2002. This Registry has become operational on March 31, 2011.
The Registry will help in creation of a centralized data base of all immovable properties and will enable prevention of frauds in housing loan cases involving multiple lending from banks/HFIs on the same immovable property. This will constitute an important step in developing the market infrastructure.
Housing Schemes in Kerala
(i) Bhavanashree: This scheme is the Housing Micro-finance wing of Kudumbashree.
This scheme is primarily aimed at providing micro finance to Self Help Group (SHG) members for construction of new houses as well as for repairs to existing houses. The loan amount under this scheme ranges from 30,000 - 50,000 to be disbursed in stages.
(ii) EMS Housing Scheme: The main objective of this scheme is to provide house sites with a house to the landless poor and a house to every homeless poor family. The program is implemented through village panchayats, municipalities and corporations.
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