RBI said the funds raised so must not be used for the acquisition of land. RBI has defined affordable housing project as a project, which has 60% of permissible floor-space-index (FSI) for units having maximum carpet area of up to 60 square meters.
A developer wishing to raise funds through forex loans must have a proven track record, five years experience in undertaking residential projects and must have not defaulted in any of the previous financial commitments. Further, the project must be free from any litigation.
Housing Finance Companies (HFC) with a minimum paid-up capital of R50 crore, net owned funds of at least R300 crore for last three years are eligible to borrow through ECBs.
The HFC must not borrow through ECB exceeding 16 times its net owned funds and must have net non-performing assets within 2.5% of net advances, the RBI said.
Developers and HFCs will not be allowed to raise funds through foreign currency convertible bonds, RBI said.