Loans up to Rs 25 lakh for government employees!

New Delhi, November 10: In a good news for all central government employees, the government under the House Building Advance scheme will lend upto Rs 25 lakh, at 8.5% interest to build or purchase houses.

Now, an employee can borrow HBA upto 34 months of the basic pay subject to a maximum of twenty five lakh rupees or cost of the house or the amount according to repaying capacity, whichever is the least.

It has been hiked as per the recommendations of the 7th Pay Commission. Now both spouses, if they are central government employees, are eligible to take HBA either jointly, or separately.

Earlier the employee was sanctioned an advance at an interest rate of 2.5% 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 the competent authority, a rebate of interest to the extent of 2.5% was allowed.

The methodology of recovery of HBA shall continue as per the existing pattern recovery of principal first in the first fifteen years in 180 monthly instalments and interest thereafter in next five years in 60 monthly instalments.

The house/flat constructed/purchased with the help of House Building advance can be insured with the private insurance companies which are approved by Insurance Regulatory Development Authority (IRDA).

This attractive package is expected to incentivize the government employee to buy house/ flat by taking the revised HBA along with other bank loans, if required. This will give a fillip to the Housing infrastructure sector.