Boost to Housing Sector Finance
Various steps have been taken in this year’s union budget to give a boost to housing sector finance. The existing scheme of interest subvention of 1% on housing loans has been liberalized by extending it to housing loan upto Rs. 15 lakh where the cost of the house does not exceed Rs. 25 lakh from the present limit of Rs. 10 lakh and Rs. 20 lakh respectively.
On account of increase in prices of residential properties in urban areas, it has been proposed to enhance the existing housing loan limit from Rs. 20 lakh to Rs. 25 lakh for dwelling units under priority sector lending.
To provide housing finance to targeted groups in rural areas at competitive rates, the budget proposes to enhance the provision under Rural Housing Funds to Rs. 3000 crore from the existing Rs.2000 crore.
The Union Finance Minister Sh. Pranab Mukherjee while presenting this year’s budget has also proposed the creation of a Mortgage Risk Guarantee Fund under Rajiv Awas Yojana. This would guarantee housing loans taken by Economically Weaker Sections and Low Income Group households and enhance their credit worthiness.
To prevent frauds in loan cases involving multiple lending from different banks on the same immovable property, the Government has facilitated setting up of Central Electronic registry under the SARFAESI Act, 2002. This Registry will become operational by March 31, 2011.
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