Affordable Housing in Rajasthan

Rajasthan Chief Minister Ms Vasundhara Raje has recently launched a new scheme that aims to provide 20% cheaper homes to people from lower income group (LIG) and economically weaker sections (EWS). This is under the Rajasthan Housing for All project of the Rajasthan Housing Board that aims to build ten lakh homes by 2022 - 85% of which would be EWS and LIG. Under the scheme, 10% of land in both, government and private housing schemes would be reserved for LIG and EWS housing. In townships, developers would have to reserve 7% of the land for the same with the government offering a relaxation in the floor - area ratio conditions to private builders.

The Jaipur Development Authority (JDA) had under the scheme announced and then scrapped a scheme called the JDA New Flat Scheme 2015. The scheme that invited applications for 621 flats - 337 in EWS category, 219 in LIG category and 65 in MIG category - was scrapped in between after finding irregularities with allottee applications. However, the JDA has recently announced reinvitation of applications for EWS, LIG and MIG (medium income group) allotments under the same scheme.

The JDA has invited online applications for these flats from November 4 to 18 and will upload the list of allottees on their website on December 11, 2015 after documents of all allottees have been verified on December 9, 2015. A lottery of these houses would then be drawn on December 16, 2015.

MHFC has sanctioned over 1000 loans for allottees buying at these schemes in Jaipur and other districts in the state like Jhunjhunu, Jodhpur etc. and looks forward to helping out even more allottees needing loans to buy houses under these schemes.

MP (Madhya Pradesh) Housing Board - applications open for EWS (5.45 lakhs) / LIG (12.31 lakhs) flats in Bhopal

MP Housing Board has announced / opened a lottery of 912 flats in Bhopal aimed at lower income families (432 EWS and 480 LIG) - see below link for more details.

MP Housing Board advertisement

Applications are currently open till Dec 10 (or till the MP Housing Board receives applications for all the flats) - and we believe that this represents a very good chance of getting a home in Bhopal at a price of Rs 5.45 lakhs approx (in the case of EWS) and Rs 12.31 lakhs (LIG flats). 

As already discussed in earlier posts, Housing Board schemes (including this scheme) is an automatically approved developer for MHFC. Hence, for housing loans (of max 10 lakhs) on MP Housing Board flats, but only to buyers who are from the informal sector (those lacking salary slips or income tax returns to prove incomes) or financially excluded (who cannot get loans from other housing finance companies easily) - please contact our local representative - Deepak Sarathe - on 9755333018 - or email him on deepak.sarathe@mhfcindia.com. You may also contact our Head Office (Mumbai) on contact@mhfcindia.com (website www.mhfcindia.com).

DDA allotments declared

Draw  for the Delhi Development Authority's (DDA's) mega housing scheme was held on Nov 25, and the results are now available on DDA website. Per the HT article (link below), DDA vice-chairman Balvinder Kumar said flats will be handed over to the lucky winners only after they are completely constructed with all amenities.

"All payments ... will have to be made online...almost all flats will be ready for hand over by end of December 2014."

HT article on the DDA allotment process

and link to the actual results on the DDA website

DDA allotment results - Nov 2014

Note that like most developers linked to state bodies and authorities, the DDA will be an automatically approved developer for MHFC. Hence, for housing loans on DDA flats, but only to buyers who are from the informal sector (those lacking salary slips or income tax returns to prove incomes) or financially excluded (who cannot get loans from other housing finance companies easily) - please contact us on 22660427 / 0069 or email us on contact@mhfcindia.com (website www.mhfcindia.com) when a loan is required.

MP Housing Board - launch of EWS / LIG housing flats

The MP Housing Board ("MPHB") has just launched approx 900 flats (432 EWS / 480 LIG) - see link below to the pdf of the brochure - which indicates that price of EWS flat is at 5.45 lakhs and price of LIG flat is at 12.31 lakhs. The scheme was launched on Nov 10, 2014 and is expected to be open for a month.

MP Housing Board scheme - pdf

Of course, these will be approved projects for MHFC, which is already working closely with and supporting allottees in Bhopal Development Authority ("BDA") schemes for EWS / LIG families - and thus, we will finance successful MPHB allottees as well who require a loan and are from our segment (financially excluded lower income families) subject to terms and conditions.

For more details on loans available, please call Mr Deepak Sarathe our representative in Bhopal on 97553-33018 or email us on contact@mhfcindia.com.

DDA Housing Scheme 2014 opens - 25,034 flats on sale

Some announcements regarding new MHADA flats that will be available in 2014 - about 25,000 flats of which about 90% expected to be under EWS (pricing expected at between 7 and 11 lakhs).

Times of India
Economic Times
Business Today

"We are offering 25,034 flats in the 2014 scheme out of which 22,627 would be one-bed room apartments." said Balvinder Kumar, Vice-chairman, DDA. 

"The 'DDA Housing Scheme 2014' would be open to applicants from September 1 and the last date to receive the application is October 9. The draw of lots would preferably be taken out within 20 days of the close of the scheme," a senior DDA official said, adding, applicants can also apply online. 

DDA for the first time has also introduced a five-year lock-in period for ownership of the flats, to cut out the middleman and reduce the scope of speculative buying. Interestingly, a senior official said that from now on, DDA will adopt a practice of announcing a housing scheme only when the flats are in "ready to move-in" condition. "Learning from past experience when flats could not be handed over to allottees even months after draws were held, and we faced a lot of criticism, this time we will announce dates only after ensuring that the flats are ready to move in," said a senior official.

Note that like most developers linked to state bodies and authorities, the DDA will be an automatically approved developer for MHFC. Hence, for housing loans on DDA flats, but only to buyers who are from the informal sector (those lacking salary slips or income tax returns to prove incomes) or financially excluded (who cannot get loans from other housing finance companies easily) - please contact us on 22660427 / 0069 or email us on contact@mhfcindia.com (website www.mhfcindia.com) after allotment and when a loan is required.

Budget 2014-15 - impact on low income housing

Firstly this is a government that has in its manifesto a "housing for all" objective - by 2022 in fact - and thus there are major expectations of several important measures, immediate and over the next few months, that will promote and support this critical sector. 

In this budget (2014-15), there were some specific measures :

1. FDI can be brought in fairly easily (usual restrictions on min amount and size of project waived) for projects which commit at least 30% for low cost affordable housing (not defined but am sure clarifications will be issued shortly). This will benefit private developers and add another source of capital - which might be useful as financing land purchase is difficult domestically; 

2. Rural Housing Fund (run by the NHB) allocation to go up by Rs 2,000 cr to Rs 8,000 cr. This is the refinance scheme which provides funds to HFCs at a lower cost - while the rates are attractive, and can be valuable in helping EWS / LIG families in rural areas own a home, the issue for most HFCs (esp for newer ones like MHFC) is that this scheme has an onlending cap (2.5% currently) which makes it operationally not viable. We believe the extra allocation to the scheme is very useful, but to make it really effective and to encourage widespread utilisation, the cap should be withdrawn or raised so that it is viable for lenders as well. 

3.  Most critically, and whats seems very positive, but where details awaited,  the FM has proposed setting up a Mission on Low Cost Affordable Housing anchored in the National Housing Bank, under which Rs 4,000 crores has been allocated for the NHB - and where the aim would be to increase the flow of cheaper credit for affordable housing to the urban poor/EWS/LIG segment.

In general, the FM also stated the openness of the Government to examine other suggestions that would spur the sector reflecting that this would be a priority. So all in all, while nothing very specific and possibly immediate, there does to be a general willingness to make positive changes in the sector and further detailed measures could possibly be announced shortly in line with the overall guidance provided in this Budget speech.  

Gujarat Chief Minister Anandi Patel cancels Gujarat Housing Board draw for affordable houses

Just a follow up story that the Gujarat Housing Board draw for 8,000 flats (in Ahmedabad, Surat, Rajkot and Vadodara) were cancelled yesterday - see link to article in the DNA below:

DNA article - June 20, 2014

Bhubhaneshwar Development Authority - 7,000 housing units coming up this year

Per this Indian Express article - link below - the Bhubhaneshwar Development Authority ("BDA") plans to build 7,000 homes this year of which 5,000 units will be built for EWS / LIG / MIG families - and after the first year, the BDA is planning to add about 5,000 low cost housing units every year. A BDA official said the purpose of the proposal, like all other affordable housing projects, is to make low cost housing available for the urban poor.  

Express article - June 13, 2014

It seems that the housing units will comprise G+4 multi-storey buildings and the BDA would like to cap the price of the lowest housing unit at Rs 5 lakh.

Of course, these will be approved projects for MHFC and we will finance successful allottees who require a loan and are from our segment (financially excluded lower income families) subject to terms and conditions.

For more details on loans available, please call our Head Office in Mumbai on 022-22660427 or email us on contact@mhfcindia.com.

EWS projects approved in Vadodara

Two housing schemes for the economic weaker sections (EWS) of the society will come up in Vasna and Sayajipura areas of the city. Vadodara Municipal Corporation (VMC) standing committee cleared the proposals for these schemes that will come up under the chief minister's housing scheme under the public-private partnership mode. 372 apartments will be constructed under the EWS category at Vasna while 360 will come up at Sayajipura. 

TOI Article - March 8, 2014

MHFC will of course support applicants who believe they can service a loan satisfactorily but are being excluded by mainstream banks / HFCs. For more information on how to apply, and MHFC loan terms and conditions, email contact@mhfcindia.com or call on 022-22660427.

Mint Article - Affordable Housing to get boost

Interesting article this morning (July 24, 2013) on possible government measures to stimulate low income housing -  acc to the report, the govt plans to allocate Rs 35,000 over 4 years to implement 3 programes related to low income housing including

- a scheme for rehabilitation of slum dwellers ;
- a scheme for providing interest rate subsidies on housing loans; and
- a scheme for helping private sector developers in this space (which includes fast track approvals, tax concessions, service tax exemptions etc)

The proposals are expected to get cabinet clearance within a month - for more details see link below:

Mint article - July 24, 2013

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).

Budget

thoughts / quick summary on the budget impact on MHFC / affordable housing:

1. nothing in it for the private developers / financiers - no specific schemes / amendments to previous schemes

2. however, significant impact on govt schemes which directly and indirectly impact LIG / EWS housing:
(a) rural housing fund (run by the NHB) allocation to go up by Rs 2,000 cr - this is the refinance scheme which provides funds to HFCs at 8% - while all our loans would eventually qualify (since our suburban focus falls under rural), not sure how we will benefit as not sure what the availability of this resource will be after our qualification period (generally 2 years)
(b) JNNURM allocation to almost double to about Rs 12,800 cr - assuming this is 25% used for urban housing, this is about Rs 3200 cr - given that grant / subsidy for housing is normally capped at Rs 1.5 lakhs, I guess this can support about 200,000 homes - which is significant.
(c) Indira Aawas Yojana - this is aimed at rural housing - and allocation also increased (38%) to Rs 8800 cr - which is significant but not sure whether MHFC can access since mostly rural and very small ticket (Rs 25,000 loan size normally and house budget less than Rs 50,000 normally)

but the main announcement is the new scheme
(d) Rajiv Awas Yojana - for which details still awaited (and expected to come out on Aug 20) - which has recd funding of approx Rs 4000 cr and is aimed at urban low income housing - its expected to be on the lines of the JNNURM program - so a mix of grant (from Central Govt), land (from state govt) and loan (envisaged from the HFCs / banks which is where MHFC can play a role).

all in all, private developers might be disappointed by the budget, but for HFCs willing to partner with the states, there are possibiities