NHB to disburse housing loans for low income group this fiscal

“We will be expanding the size of our loan portfolio to Rs 10,000 crore this fiscal as part of our strategy for further development of low and moderate income housing market,” the National Housing Bank Chairman and Managing Director R V Verma told newspersons here on Monday.

Loan portfolio

The bank will explore the scope for borrowing funds this year in the range of Rs 6000 crore and Rs 8000 crore to expand its loan portfolio, he said.

The National Housing Bank last fiscal made a loan disbursement of Rs 8160 crores through various housing finance companies. Rural housing share constituted 43 per cent amounting Rs 3696 crore.

“In the last fiscal alone National Housing Bank was instrumental in disbursement of loans for 1.83 lakh residential units for low and moderate income group. Average loan size was Rs 4.45 lakhs,” Verma said.

The National Housing Bank is now working on evolving a strategy to further enhance housing finance for low and moderate income households in urban and rural areas across the country, he said.

Concessional refinance

“Keeping this National Housing Bank is making raid foray into housing microfinance market. We have sanctioned financial assistance to 23 micro financial institutions amounting to 83 crore across a number of states,” Verma said.

To encourage flow of housing finance to low-income households, the National Housing Bank is now examining the possibility of giving concessional refinance to housing finance companies (HFCs) — set up exclusively to fund ownership of these households — within a year of commencement of operations, a senior National Housing Bank official indicated.
Normally, housing finance companies can tap National Housing Bank for refinance at concessional interest rates in respect of home loans, given by them only after their business stabilises — two to three years after kicking off operations.

The proposal to offer refinance to housing finance companies, catering solely to the home loan needs of those in the low and lower middle income segments, is expected to have a beneficial ripple effect.

Banking experts say housing finance companies, based on refinance backing, will lend more. Knowing that home loan is available to those in the low income bracket, builders will be encouraged to construct affordable dwelling units, experts feel.

Low and lower-middle income households are those with a monthly income of Rs 3,000-20,000. A low-income housing unit is one whose maximum selling price does not exceed Rs 15 lakh.

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