House Building Advance Rules 2017 – 7th Pay Commission HBA order

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House Building Advance Rules 2017 – New rules set in supersession of old Rules

House Building Advance Rules 2017 – 7th Pay Commission HBA order – Ministry of Housing and Urban Affairs OM dated 09.11.2017


Government of India

Ministry of Housing & Urban Affairs

Housing-III Section

Nirman Bhawan, New Delhi,

Dated 09.11.2017


Subject: House Building Advance Rules (HBA) — 2017.

The following House Building Advance Rules is in supersession of existing rules on the subject:

1. Introduction

Grant of House Building Advance for Central Government employees is regulated in terms of rules and regulations laid down from time to time by the Ministry of Housing & Urban Affairs (erstwhile Ministry of Urban Development). These rules are as under:

2. Purpose

House Building Advance (HBA) is admissible to an employee for only one of the following purposes:-

i. Constructing a new house on the plot owned by the employee or spouse, either jointly or individually.

ii. Purchasing a plot and constructing a house thereon.

iii. Purchasing a plot under co-operative Schemes and constructing a house/ flat thereon or acquiring a house through membership of Cooperative Group Housing Societies.

iv. Purchase/construction of house under the self-financing schemes of Delhi Bangalore, UP, Lucknow etc.

v. Outright 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., but not from private individuals.

vi. Expansion of living accommodation of an existing house owned by the employee or jointly with spouse. The total cost of the existing structure (excluding cost of land) and the proposed additions should not exceed the prescribed cost ceiling under these rules.

vii. Repayment of loan or advance taken from a Government or HUDCO or private sources even if the construction has commenced, subject to certain conditions.

viii. Existing employees who has already taken Home Loans from Banks and others Financial Institutions are allowed to migrate to this scheme , subject to fulfillment of extant conditions.

ix. Constructing only residential portion of building on a plot earmarked for a shop cum residential plot , in a residential colony, subject to prescribed cost conditions.

3. Eligibility

i.  All permanent government  employees.

ii.  All other employees  with at least 5 years of continuous  service, provided they do not hold permanent  appointment  under a State Government  and the sanctioning  authority is satisfied about their likely retention  in service till the house is built and mortgaged.

iii. Members  of  All  India  Services deputed  for  service under  the Central
Government/Company/ Association/Body of  individuals whether incorporated  or not, which is wholly or substantially  owned or controlled by the Central Government  or an International  Organization, and autonomous body not controlled  by Government  or Private Body.

iv.       Employees  of Union Territories  and North East Frontier Agency.

v.      Staff/ Artistes of the All India Radio who fulfil the condition prescribed  at (ii) above and have been appointed in long term contracts extending to the age as per extant rules.

vi.   Central  government  employees  governed  by The Payment  of Wages  Act,

vii.  Central government  employees  on deputation to another Department  or on Foreign Service.   Such cases to be processed  by the Head of the Office of the Parent Department.

viii.              Extant  rules  for  eligibility   conditions   of  Ex-servicemen   and  of  central government  employees  under suspension  remains unchanged.

Note:  In cases where  both the spouses are central government employees and are both eligible for grant of House Building Advance, the advance will be admissible to both of them jointly/ separately.

4. Cost Ceiling Conditions –

l.      Cost of the house to be built /purchased  (excluding  the cost of plot) should  not exceed  139 times  of the  basic  pay of the employee  subject  to a  maximum  of Rs.1.00 crore (one crore) only.  In individual cases,  if the Administrative  Ministry is satisfied  on  the  merits  of  the  case,  the  cost  ceiling  may  be  relaxed  up to  a maximum of 25% by the Head of the Department.

5. Amount of Advance

i.      Only one advance  shall be sanctioned  to the government  servant  during  his/ her entire service.

ii.        The maximum  amount of advance shall be:

a)   34 months basic pay subject to a  maximum of Rs.  25.00   lakhs only (Rs. Twenty five lakhs), or cost of the house/flat, or the amount according to repaying capacity, whichever  is the least for construction/purchase   of new house/flat.

b)   For expansion  of existing  house, the amount of HBA will be limited to 34 months
basic pay subject to maximum of Rs.10.00   lakhs only (Rs.  Ten lakhs),  or the cost of the expansion,   or the amount according to repaying capacity, whichever  is the least.

c)   The amount of the advance shall be restricted to 80% of true cost of the land and construction  of house or cost of expansion  of living accommodation   in the case of construction  in rural areas.  This can be relaxed and 100% can be sanctioned if the Head of the Department  certifies that the concerned  rural area falls within the periphery  of town or city.

6. Repayment Capacity

For the purpose of calculating the admissible loan amount,  the repayment capacity of the central government  employee  shall be calculated  as below:

a) In cases of employee retiring after
20 years.
40% of basic pay.


In cases of employee retiring after
10  years  but  not  later  than  20 years.
Up  to  40%  of  basic  pay.   65%  of  OCR
Gratuity may also be adjusted.


In cases of employee retiring within 10 years. Up to 50% of basic  pay OCR Gratuity  up to 75% can be adjusted.

7.  Applicable Rate  of  Interest and  Methodology of  Recovery   of  House BuildingAdvance

i.               The Interest on Housing  Building Advance for the financial year 2017-18 onwards shall  be  8.50%.    This  shall  be  reviewed  every  three  years  to  be  notified  in consultation  with Ministry of Finance.

ii.              The methodology  of recovery of HBA shall continue  as per the existing pattern of
recovery  of principal  first  in the first fifteen years  in not more than  180 monthly instalments  and interest thereafter  in next five years in not more  than 60 monthly instalments.  The advance  carries simple interest from the date of payment of first instalment.

iii.               All  cases  of  subsequent   tranches/   installments   of  HBA  being  taken  by  the
employee  in different  financial  years shall be governed  by the applicable  rate of interest in the year in which the HBA was sanctioned,   in the event of change in the rate of interest.

Note: The clause of adding a higher rate of interest at 2.5% (two point five percent) above the  prescribed  rate during  sanction  of House  Building  Advance,   as reproduced below, stands withdrawn.

Sanction  should stipulate  the interest 2. 5% over and above the scheduled  rates with the stipulation   that,  if  conditions  attached  to  the  sanction  including   those  relating  to  the recovery  of amount  are fulfilled  completely  to the satisfaction  of competent  authority,a
rebate of interest  of the extent of 2. 5% will be allowed.

8. Disbursement

i.   Advance  for purchase  of ready built house can be paid in one lump sum as soon as the applicant  executes  an agreement  in the  prescribed  form.   The employee should  ensure  that  the  house  is purchased  and  mortgaged  to the  Government within 3 months of drawl of the advances.

ii.       Advance for purchase/ construction of new flat may be paid either in one lump sum
or in convenient  instalments  at the discretion  of the  Head of  Department.  The employee  should execute  the agreement  in prescribed  form before the advance/ first instalment  of advance is paid to him/ her. The amount drawn by the employee should be utilized for the purchase/ construction  of the flat within one month.

iii.      Advance   for  construction/   expansion  of  living  accommodation,  etc.,   shall  be payable in two instalments  of 50% each. The first instalment will be paid after the plot and proposed  house/  existing  house is mortgaged  and the  balance  on the construction-reaching   plinth level.

iv.      Advance  for expansion  to be carried out on the upper storey of the house will be disbursed  in two instalments,  first instalment on executing the mortgage deed and the second instalment  on the construction  reaching roof-level.

v.  In the case of advance for purchase of plot and construction  of house, the advance
will be disbursed  as below:

a)  Single Storeyed  House:  After agreement  in prescribed  form is executed on production  of surety bond,  40% of the advance  or actual  cost will  be disbursed for purchase of plot. The balance amount will be disbursed in two equal  instalments,  first after the mortgage  is executed  and second on the construction  reaching plinth level.

b)  Double Storeyed House:  30% of advance for cost of plot will be disbursed on executing  the agreement.  The balance amount will be disbursed  in two equal instalments,  the first on executing the mortgage deed and the second on construction  reaching plinth level.

9. Mortgage and Creation of Second Charge

a)  House shall be mortgaged on the behalf of President of India.   However,  the employee,  if he wishes to take a second charge to meet the balance cost of the  house/  plot or flat from  recognized  financial  institutions,   then  he/ she may declare  the same  and apply for NOC at the time  of the applying  for HBA. NOC for second  charge will be given along with sanction order of HBA.  The  total  loan form  HBA and from  all other  sources  cannot  be beyond ceiling  cost of the house as defined  under para 4 above.

b)    In case if HBA is availed by both husband/ wife jointly,

i.    HBA Mortgage  paper, insurance  paper and other papers  regarding property shall be submitted to one of the loan sanctioning  authorities of their choice.

ii.   A  No  Objection Certificate may  be  obtained  from  the  2nd  loan sanctioning  authority.

iii.  The  property  mortgaged  to  behalf  of  President  of  India,   shall  be reconvened on  the  prescribed   form   to  the  central   government employee  concerned  (or their  successors  in interest,   as the  case may be),  after the advance together with interest thereon,  has been repaid  to Government   in  full  and  after  obtaining   No  Demand Certificate in respect  of  HBA  loan  sanctioned   by  the  2nd    loan sanctioning authority.

10. Insurance

a)    Immediately   on  completion   of  construction/purchase    of  house/flat,   the employee shall .     insure  the  house  with   the   recognized   institutions   as approved  by Insurance  Regulatory and Development  Authority (IRDA), for not less than the amount of advance and shall keep it so insured against damage  by fire,  flood  and lightning  till the advance  together  with  interest thereon  is repaid in full and deposit the policy documents  with the Head of the Department (HoD).   Renewal of insurance will be done every year and premium receipts produced for inspection  of the HoD regularly.

b)   Penal   interest  of  2%  over  and  above  existing   rate  of  interest will  be
recovered  from the employee  for those  periods which are not covered  by insurance of the house.

11. Migration

For existing House Building Advance beneficiaries who wish to migrate,  a separate order for migration to the revised House Building Advance  rules will be issued shortly.

12. Extant rules

Apart  from  above  stated  changes  in relevant  sections  in the earlier  version  of House Building Advance  rules,  all other extant  rules shall  continue  to apply till further orders.

13.     This  issues  in  consultation  with  Comptroller&  Auditor  General,  in so  far  as the persons working  in the Indian Audit & Accounts Department concerned.

14.        Hindi version will follow.

15      This comes to the effect from the date  of issue.

(Shailendra Vikram Singh)


Ministry of Housing & Urban Affairs


Read / Download House Building Advance Rules 2017 – 7th Pay Commission HBA order Ministry of Housing & Urban Affairs OM I.17011/11(02016-H-III dated 09.11.2017