House Building Advance 2017 - Central Government Employees
The Government has
revised the House Building Advance (HBA) rules for Central Government
Employees incorporating the accepted recommendations of the 7th Pay
Commission. Following are the salient features of the new rules:
1.
The total amount of advance that a central government employee can
borrow from government has been revised upwards. The employee can up to
borrow 34 months of the basic pay subject to a maximum of Rs. 25 lakhs
(Rs. Twenty Five Lakhs only), or cost of the house/flat, or the amount
according to repaying capacity, whichever is the least for new
construction/purchase of new house/flat. Earlier this limit was only
Rs.7.50 lakhs.
2. Similarly, the HBA amount for expansion of the
house has been revised to a maximum of Rs.10 lakhs or 34 months of basic
pay or cost of the expansion of the house or amount according to
repaying capacity, whichever is least. This amount was earlier Rs.1.80
lakhs.
3. The cost ceiling limit of the house which an employee
can construct/ purchase has been revised to Rs.1.00 crore with a proviso
of upward revision of 25% in deserving cases. The earlier cost ceiling
limit was Rs.30 lakhs.
4. Both spouses, if they are central
government employees, are now eligible to take HBA either jointly, or
separately. Earlier only one spouse was eligible for House Building
Advance.
5. There is a provision for individuals migrating from
home loans taken from Financial Institutions/ Banks to HBA, if they so
desire.
6. The provision for availing 'second charge' on the house
for taking loans to fund balance amount from Banks/ Financial
Institutions has been simplified considerably. 'No Objection
Certificate' will be issued along with sanction order of HBA, on
employee's declaration.
7. Henceforth, the rate of Interest on
Housing Building Advance shall be at only one rate of 8.50% at simple
interest (in place of the earlier four slabs of bearing interest rates
ranging from 6% to 9.50% for different slabs of HBA which ranged from
Rs.50,000/- to Rs.7,50,000/-) .
8. This rate of interest shall be
reviewed every three years. All cases of subsequent tranches/
installments of HBA being taken by the employee in different financial
years shall be governed by the applicable rate of interest in the year
in which the HBA was sanctioned, in the event of change in the rate of
interest. HBA is admissible to an employee only once in a life time.
9.
The clause of adding a higher rate of interest at 2.5% (two point five
percent) above the prescribed rate during sanction of House Building
Advance stands withdrawn. Earlier the employee was sanctioned an advance
at an interest rate of 2.5% above the scheduled rates with the
stipulation that if conditions attached to the sanction including those
relating to the recovery of amount are fulfilled completely, to the
satisfaction of the competent authority, a rebate of interest to the
extent of 2.5% was allowed.
10. The methodology of recovery of HBA
shall continue as per the existing pattern recovery of principal first
in the first fifteen years in 180 monthly instalments and interest
thereafter in next five years in 60 monthly instalments.
11. The
house/flat constructed/purchased with the help of House Building advance
can be insured with the private insurance companies which are approved
by Insurance Regulatory Development Authority (IRDA).
12. This
attractive package is expected to incentivize the government employee to
buy house/ flat by taking the revised HBA along with other bank loans,
if required. This will give a fillip to the Housing infrastructure
sector.
PIB
