Even after two full years are over from the date when Government received the recommendations of Sixth Pay Commission, the modalities for Housing Loan proposed by 6cpc are yet to be framed. In the mean time Ministry of Urban development issued an interim order for grant of HBA after implementation of Sixth Pay Commission.
It could be seen that the maximum Housing loan that could be obtained after implementation of sixth pay commission report is only Rs.7.5 lakhs. We feel this would serve no purpose and Govt should come up with the new modalities for HBA as early as possible.
You might be aware of the recommendations of 6cpc in respect of Housing loan. As per 6cpc recommendations the existing system of lending directly by the government it to be dispensed with and nationalized banks would lend to government employees at a subsidized Interest rates.
This is the extract of 6cpc’s recommendations regarding HBA.
The Commission, accordingly, recommends that the Government should not give any interest bearing advances. Instead the Government should enter into agreement with leading PSU banks to extend this facility at pre-determined competitive rates to Government employees. While the employee shall take the loans/advances directly from the bank with the approval of the sanctioning authority in the Government and also repay the installments directly to the bank. The Government will give an interest subsidy equal to 2 percentage points in rate of interest being charged by the bank to the employee. The interest subsidy for employees with disabilities will be equal to four percentage points in the rate of interest being charged by the bank.
This is the existing procedure as far as the House building Advance of CG employees is concerned
The Scheme of House Building Advance to Central Government Employees is applicable for constructing/acquiring house/flats of their own.
Also shortly known as HBA, is admissible to all permanent employees and to temporary employees who have rendered 10 years of continuous service.
With effect from 27-11-2008, the following provisions of grant of House Building Advance shall be in operation, until further orders:-
- The maximum limit for grant of HBA shall be 34 months’ of pay in the pay band subject to a maximum of Rs. 7.50 lakh or cost of the house or the repaying capacity whichever is the least, for new construction/purchase of new house/flat.
- The maximum limit for grant of HBA for enlargement of existing house shall be 34 months’ pay in the pay band subject to a maximum of Rs. 1.80 lakh or cost of the enlargement or repaying capacity, whichever is the least.
- The cost ceiling limit shall be 134 times the pay in the pay band subject to a minimum of Rs.7.50 lakh and a maximum of Rs.30 lakh relaxable up to a maximum of 25% of the revised maximum cost ceiling of Rs.30 lakh.
- The rate of interest on House Building Advance is between 5% to 9.5% ,depending on the loan amount.
- The repaying capacity of Govt. servants who have more than 20 years of remaining service has been revised from 35% to 40% of pay. (Pay means pay in the pay band).
HBA is granted for:
- Constructing a new house on the plot owned by the official or the Official and the Official’s wife/husband jointly.
Purchasing a plot and constructing a house thereon.
- Purchasing a plot under Co-operative Schemes and Constructing a house thereon or acquiring house through membership of Co-operative Group Housing Scheme.
Purchasing /construction of house under the Self-Financing scheme of Delhi, Bangalore, U.P., Lucknow etc.
- Outright purchase of new ready-built house/flat Housing boards, Development Authorities and other statutory or semi-Government bodies and also from private parties.
- Enlarging living accommodation in an existing house owned by the official or jointly with his/her wife/husband. The total cost of the existing structure (excluding cost of land) and the proposed additions should not exceed the prescribed cost ceiling.
- Repayment of loan or advance taken from a Government or HUDCO or Private source even if the construction has already Commenced, subject to certain conditions.
- Constructing the residential portion only of the building on a Plot which is earmarked as a shop-cum-residential plot in a Residential colony.
- If both the husband and wife are Government of India employees, HBA shall be admissible to only one of them.
- The applicant or spouse or minor child should not already own a house in the town/Urban agglomeration where the house is proposed to be constructed or acquired.
- The title to the land should be clear. The land may be owned either:
- by the Government employee; or
- jointly by the Government employee and spouse.
|S. No.||Length of remaining|
service of the applicant.
|1.||Retiring after 20|
|40% of pay in the payband|
|2.||Retiring after 10 years|
but not later than 20 years.
|40% of pay in the pay band @ plus 65%|
of * Retirement Gratuity
|3.||Retiring within 10|
|50% of pay @ plus 75%|
of * Retirement Gratuity
|S. No.||Purpose of HBA||Disbursement|
construction/enlargement (single or double storeyed).
|50% –50%||on execution of mortgage deed on construction reaching|
plinth level (Ground Floor).
|(ii)||For purchase of land|
and construction (Single storeyed)
|40% or –actual cost|
|for purchase of plot on execution of agreement and|
production of Surety Bond.On execution of Mortgage deed.
On construction reaching plinth level.
|(iii)||For purchase of land|
and construction (Double storeyed)
|35% or actual cost |
|for purchase of plot on execution of agreement and production|
of Surety bond.
On execution of the mortgage deed.
On construction reaching the plinth level.
|(iv)||For purchase of ready|
|100% – in one lumpsum.|
flat/house from Co-operative Group Housing Society.
|20% – |
Towards purchase of land by the Society.
|(vi)||For purchase of flat|
under SFS of Development Authorities etc.
|No payment for initial|
registration Deposit. May be released in not
more than 5 instalments. But the fifth and final instalment should not be less than 10% and is to be
released for making final payment.
Repayment of Advance:
The recovery of advance shall be made in not more than 180 monthly installment and interest shall be recovered thereafter in not more than 60 monthly installments. In case Government servant is retiring before 20 years, repayment may be made in convenient installments and balance may be paid out of Retirement Gratuity.
The rates of interest on HBA with effect from 1.4.2003 are:
|S. No.||Amount of Advance|
sanctioned to a Government Servant
|Rate of Interest on|
HBA (Per Annum).
Commencement of Recovery:
|Construction of a house|
or enlargement of living accommodation
|From pay for the|
month following the completion.
The pay for the 18th
|Purchase of land and|
|From pay for the|
month following the completion of the house.
From pay for the 24th
|Purchase of Flat under|
SFS from Development Authority/Housing Society.
|From the pay for the|
18th month after date of payment of 1st installment.