Central Government Employees are provided with the House Building Advance (HBA) as per the 7th Pay Commission recommendations. The employees can avail of HBA at the rate of 7.1% till 31st March 2023. This article looks at the eligibility, purpose for HBA, cost ceiling, amount of advance and calculation of repayment capacity and methodology of recovery of HBA.
Why is HBA provided?
- Construction of a new house on the plot owned by the employee or spouse, either jointly or individually.
- Purchase of a plot and constructing a house thereon.
- Purchasing of a plot under co-operative schemes and constructing a house/ flat thereon or acquiring a house through membership of Cooperative Group Housing Societies.
- Purchase/construction of house under the self-financing schemes of Delhi Bangalore, UP, Lucknow etc.
- Purchase of a new ready-built house/ flat from Housing Boards, Development Authorities and other statutory or semi-Government bodies and from registered builders i.e., registered private builders, architects, house building societies, etc. However, HBA is allowed for the purchase of ready-built house/flat from private individuals.
- Expansion of living accommodation of an existing house owned by the employee or jointly with spouse.
- Repayment of loan or advance taken from a Government or HUDCO or private sources even if the construction has commenced, subject to certain conditions.
- Employees, who had taken home loans from banks, can migrate to HBA scheme subject to certain conditions.
- Construction of only the residential portion of the building on a plot earmarked for a shop-cum-residential plot, in a residential colony, subject to the prescribed cost ceiling.
As per HBA rules, the cost of the house to be built/purchased should not exceed 139 times the basic pay of the employee subject to a maximum limit of Rs 1 crore. This limit is exclusive of the cost of the plot.
HBA is allowed for all permanent employees of the Central Government. In case both spouses are central government employees then both are eligible for HBA either jointly or separately. HBA is also admissible for some other categories of employees. You can check details here: https://mohua.gov.in/pdf/5a05336ac28f7HBA%20Rules%202017.pdf
How much amount is allowed
An employee can avail of only one advance during his/her entire service. The maximum amount that can be taken as HBA will be: 34 months basic pay subject to a maximum limit of Rs 25 lakh only. For the expansion of the existing house, the amount of HBA is limited to 34 months basic pay subject to a maximum limit of Rs 10 lakh.
Also, the amount of advance will be restricted to 80% of the true cost of the land and construction of house or cost of expansion of living accommodation in rural areas. The HBA rules say that this amount can be relaxed to 100% upon certification by the Head of the Department that the concerned rural area falls within the periphery of a town or city.