The Employees’ Provident Fund Organisation (EPFO) has for the first time introduced a group housing scheme under which a subscriber can now withdraw 90% of the accumulated sum parked with the retirement fund body to buy housing units or for building up dwelling units. The funds can be used to built units in non-government housing projects as well.
The existing individual housing scheme, which elicited a poor response, is confined only to the government or notified housing projects. The new housing scheme will give a fillip to the government ‘Housing for All’ programme.
Under the amended scheme, subscribers can also utilise the subsidised loan facility available under the Pradhan Mantri Awas Yojana (PMAY) scheme and utilise the future EPF remittances to service the loan.
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As per the scheme, a minimum of 10 subscribers can join hands to form a society and jointly buy housing units from a builder, public or private, which was earlier restricted to only government or notified projects. To avail the scheme, subscribers must have at least three years of service.
EPFO would sanction 90% of the PF accumulation and interest thereon or the cost of the acquisition of the property, whichever is lower, into the authorised account. The member can also choose to pay the EMI of the loan, wholly or partly, from the amount standing to the credit of the member in the fund. However, if a member ceases to exist or where the amount is not sufficient to pay the EMI, EPFO would not be held responsible.
“If the withdrawal or finance granted exceeds the amount actually spent for the purpose for which it was sanctioned, the excess amount shall be refunded by the member to the fund in one lump sum within thirty days of the finalisation of the purchase or the completion of the construction of, or necessary additions or alterations to a dwelling house or flat,” the EPFO said in a notification.
The retirement fund body will initially target 5-10 projects in urban areas and 2-3 projects in semi-urban areas.