Scheme of 1% Interest Subvention on Housing Loans
The Union Finance Minister during the Budget for 2009-10, had announced a Scheme of 1% Interest Subvention on individual housing loans upto Rs.10 lakh, provided the cost of house does not exceed Rs.20 lakh. The validity period for the Scheme is October 01, 2009 to March 31, 2011.
From April 01, 2011 onwards the Scheme was modified with eligibility extended to individual housing loans upto Rs.15 lakh, provided the cost of unit does not exceed
Rs.25 lakh. The present validity period for the Scheme is April 01, 2011 to March 31, 2013.
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Objective: |
The objective of the Scheme is to provide interest subsidy on housing loan to improve affordability of housing to eligible borrowers in the middle & lower income groups. |
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Duration of the Scheme |
The Scheme will be in operation from October 01, 2009 to March 31, 2013. |
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Eligibility: |
Loan sanctioned on or after October 01, 2009 to March 31, 2011.
Interest subvention of 1 percent will be available on housing loans up to Rs.10.00 lakh to individuals for construction/purchase of a new house or extension of an existing house, provided the cost of construction/price of new house/extension does not exceed Rs.20.00 lakh. All such loans sanctioned, disbursed, during the period of operation of Scheme shall be eligible for the said interest subsidy.
Loan sanctioned on or after April 01, 2011 to March 31, 2013.
Interest subvention of 1 percent will be available on housing loans up to Rs.15.00 lakh to individuals for construction/purchase of a new house or extension of an existing house, provided the cost of construction/price of new house/extension does not exceed Rs.25.00 lakh.
All such loans sanctioned, disbursed, during the period of operation of Scheme shall be eligible for the said interest subsidy.
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Interest Subsidy: |
Subsidy of 1 % will be defined as reduction in interest rate by 100 basis points per annum from the existing rate of interest for a particular amount and tenor.
It will be applicable to the first twelve installments of all such loans sanctioned and disbursed during the currency of the Scheme and will be computed for 12 months on the disbursed amount.
The subsidy amount will be adjusted upfront in the principal outstanding, irrespective of whether the loan is on fixed or floating rate basis. |
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Nodal Agency |
National Housing Bank |
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Terms for loan and subsidy: |
The interest subsidy of 1 percent per annum will be admissible for the first year on the amount sanctioned and disbursed against eligible housing loans.
In case the loan amount is disbursed in installments, the interest subsidy will be calculated for one year and claimed separately for every installment of the loan disbursement falling within the operating period of the Scheme.
The interest subsidy will be calculated on the interest chargeable at the time of disbursement of the loan.
The borrowers may choose fixed or floating rate |
For further details contact the nearest branch of Central bank of India.