Monday, March 19, 2012

Budget 2012 - proposals related to low income housing / finance

Summary of Budget 2012 proposals which affect low income housing (developers / financing) :

• ECB (overseas borrowings) permitted for low cost affordable housing projects;
• Setting up of a Credit Guarantee Trust Fund to ensure better flow of institutional credit for housing loans;
• Enhance provisions under Rural Housing Fund from Rs 3000 crore to Rs 4000 crore;
• Extension of Interest Subvention Scheme of 1% on housing loan up to Rs 15 lakh for another year; and
• Enhancement of the limit of indirect finance under priority sector from Rs 5 lakh to Rs 10 lakh.

The ECB proposal is new and will positively impact developers who might enter this market since cheaper financing options will be made available - though we need to see the details of what constitutes low income housing when the RBI notification is issued.

RHF increase will help MHFC as will the raising of the indirect finance limit - as all our loans are less than 10 lakhs and generally to weaker sections (same objective as the RHF).

1 comment:

low cost housing said...

Nice , This is really good to see !