The Housing and Urban Development Corporation (Hudco), a public sector company, is coming up with a rent-to-own scheme under which it will finance the construction of affordable housing projects in major urban centres. The allottees will be paying rent for 20 years, which will be treated as EMI, after which the ownership will be transferred to them.
Hudco, which is under the ministry of housing and urban poverty alleviation, will be doing this in partnership with local urban bodies and state governments, who will be providing the land for the project and undertake the implementation of the project.
Well be providing 90% of the entire construction cost and the houses constructed would be prefabricated to reduce the cost and construction time, a senior Hudco official told FE.
The pilot project will be carried out in Mohali, near Chandigarh, for which Hudco has tied up with the local municipal corporation and the Punjab government.
Well be financing the construction of 15,000 flats with an investment of around R2,000 crore. The rents (read EMI), which will be revised with time, would be nominal and the allottee would be able to own the house after 20 years of continuous payment of rent, said Vinod Joshi, Chandigarh chief, Hudco.
According to senior Hudco officials, the same model will be replicated in other major cities, including the national capital region, and they are in advance talks with the government of Haryana for the same project in Faridabad.
At present, theres a shortage of 18 million houses and 905 of these are in the low-income group (LIG) and economically weaker section (EWS).
In phase one, the project will be for LIG and EWS housing, after which well target the MIG shortage, the official added.