Housing Loans To Government Employees Through Banks

The government has issued guidelines regarding housing loan to government employees, from any Public sector or Scheduled bank or NBFC. HBA advance also has been called off eventually.

What should be done first to avail of the loan?

Decide first, the bank to be approached for loan. Enquiries can be made in several banks and the interest rate ( floating / fixed), every month interest (EMI), processing charge, administration charge, pre – processing charge, documentation charge, other charges, reset duration (change in interest rate, duration applicable to our loans) can be compared. Customer services also can be considered.

Salary account

It would advisable to approach the bank with salary account for loan as the financial status of the employer would be available with the bank. Besides, it is convenient for loan repayment facility too. The interest – subsidy by the government will be credited to the salary account. Provided the salary account is not with the bank that we plan to approach for loan, present salary account can be shifted to that bank.

Eligibility

Those who have completed 5 years of service and do not own a house in their name can apply for loan. If the bank accepts, NOC should be submitted to the bank by the employer. For NOC from Finance department, the government employer has to apply through his DDO(Drawing and Disbursing Officer). The service details by DDO can be added along with this for submission in bank. The loan sanctioned order must be sent to the DDO and the government.

Loan Amount

Even though 50 times of basic salary amount is eligible, the loan amount has been limited to the maximum of 20/- lakh rupees. The subsidy would be for the loan amount applied if it is lesser than eligible amount and it would be for maximum of 20 lakh though it is more than 20 lakh. Presently 3.25% of the interest is given as subsidy. The credit and debit of subsidy and number of loan periods would be done with the salary account itself.

Terms and conditions

Bank norms will be applicable. Identity cards (KYC), NOC, salary certificate, income tax returns for 3 years, permitted building plan, estimate, asset liability records, tax receipt, location sketch, possession certificate, plot document, base document etc. are needed. If a house is to be bought, the agreement between the seller and buyer of the house should be submitted in the bank. Sanctioning of loan amount will be subject to the norms of the bank concerned.

Pre/existing housing loans

The finance department has issued an order, transferring the housing loans of 13925 government employees to The Federal bank and The Punjab National Bank. Of the 13925 loans, 6962 were taken over by the Federal bank and 6963 were taken over by the Punjab National Bank in the interest rate of 8.45% and thus bringing no excess liabilities to the government employees. The amount that has been paid every month so far will be deducted from the salary and the interest subsidy will be handed over to the banks by the governments.

Employees with less than 5 years service

The employees with less than 5 years of service can make use of PMAY (Prime Minister’s Aavaaz Yojana) scheme of the Central government. The interest subsidy rate would be 3 to 4% for PMAY (Urban) scheme.

For more information regarding loans through banks, see the circulars of the Finance Department by clicking the link below or contact the HBA section of the Finance Department – 0471 2518898.
Downloads
House Building Advance sanctioned to State Government Employees-revised guidelines published on 18-01-2019
House Building Advance sanctioned to State Government Employees from 2009-10 onwards - Transfer of Principal portion of Housing Loan Portfolio to Punjab National Bank and Federal Bank Ltd-Operating Procedure for repayment to banks.GO(P) No 166 - 2018-Fin dated 26-10-2018
House Building Advance sanctioned to State Government Employees from 200940 onwards -Transfer of Principal portion of Housing Loan Portfolio to Punjab National Bank and Federal Bank Ltd.GO(P) No 150 - 2018-Fin dated 25-09-2018
House Building Advance for State Government Employees - Availing bank financing with interest subvention.GO(P) No 143 - 2018-Fin dated 11-09-2018
House Building Advance for State Government Employees-Availing bank financing with interest subvention-GO(P)No 105/2018/Fin dtd 05-07-2018

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