The absence of a nodal agency, together with other such hurdles, have delayed the implementation of a subsidy of 5% on housing loans worth Rs 1 lakh for the urban poor. This is despite the fact that a memorandum of understanding (MoU) has already been signed between the housing finance regulator National Housing Bank (NHB) and Hudco for the interest subsidy scheme for housing the urban poor (Ishup).
The nodal agency, under the scheme launched nearly a year ago, would be responsible for accepting the applications from prospective home-loan borrowers and in turn, forwarding them to the financial institution for processing of the loan. Some other problems baffling the otherwise attractive scheme include the ambiguity over how to make land available at cheaper costs for developer of houses under the scheme.
With a view to tide over the hitches coming in the way of implementing the scheme, the ministry of housing and urban poverty alleviation held a meeting of housing finance companies (HFCs), scheduled commercial banks (SCBs) and regional rural banks (RRBs) in New Delhi on Monday. A similar meeting is likely to be held by the ministry later this week, in which officials hailing from all state governments will discuss the modalities for the formation of nodal agencies by them.
Talking about Monday?s meeting, a senior official of LIC Housing Finance told FE that the government has assured that the nodal agency will be formed by each state government shortly. The subsidy for the housing loan has been raised up to Rs 2 lakh from Rs 1 lakh under the newly launched Rajiv Awas Yojana (RAY).
The programme envisages houses with separate kitchens, toilets, and multipurpose rooms to be built in clusters of 2,000-3,000 units, with a proposed outlay of Rs 150000 crore to construct of 1.5 crore houses. The loan repayment period under the scheme will be 15-20 years.
Talking to FE on the sidelines of the launch of ?DHFL Easy Easy Loan Scheme? in Mumbai on Monday, Anil Sachidanand, chief executive officer, Dewan Housing Finance Ltd (DHFL) said, ?My company is implementing the schemes. There can be an equated monthly installment (EMI) of as low as Rs 500 per month.?
Under the DHFL Easy Home Loan Scheme, valid until 31 January, 2010, the company will provide the customers an opportunity to repay their home loans over a period of 25 years with a minimum interest rate of 8% for the first two years. Kapil Wadhawan, chairman & managing director, DHFL, said ?We are yet to receive a formal communication from IDBI that it does not want to sell its housing finance wing to us, since we have already emerged as the highest bidder for it.?
The company plans to raise Rs 1700 crore, in which a consortium of public and private sector banks, led by Union Bank of India, will provide Rs 1000 crore, said Sachidanand.