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Consumer Update / Home Loans for Affordable Housing to Cost Less: RBI

Home Loans for Affordable Housing to Cost Less: RBI

AdministratorMUMBAI19 Jun 2018

Housing loans of up to Rs 35 lakh, for dwellings costing less than Rs 45 lakh, will be treated as priority sector lending (PSL) to give a boost to the low-cost segment. This is as per the 'Statement on Developmental and Regulatory Policies' released along with the Second Bi-Monthly Monetary Policy on June 6.

PSL loans are cheaper than market interest rate. This will benefit the Economically Weaker Sections (EWS) and Low Income Groups(LIG). The housing loan limits for eligibility under priority sector lending will be revised to Rs 35 lakh in metropolitan centres, and Rs 25 lakh in other centres.

However the overall cost of the home in the metropolitan centre (with population of ten lakh and above) and at other centres should not exceed Rs 45 lakh and Rs 30 lakh, respectively, to be covered under PSL.

Currently, loans to individuals for up to Rs 28 lakh in metropolitan centres and Rs 20 lakh in other centres, are classified under priority sector, provided, the cost of dwelling unit does not exceed Rs 35 lakh and Rs 25 lakh respectively.

The RBI notification further said that the existing family income limit of Rs 2 lakh per annum for loans to housing projects for Economically Weaker Sections (EWS) and Low Income Groups (LIG) stands revised to Rs 3 lakh per annum and Rs 6 lakh per annum, respectively.

Source: News Reports