Scheme of 1% Interest Subvention on Housing Loan up to Rs. 10 lakhs

The Finance Ministry had announced a scheme of 1% interest Subvention on Housing Loan up to Rs.10 lakhs. An allocation of Rs.1,000 crores was also announced for the purpose. Pursuant to the above mentioned announcement, the Government of India has approved a Scheme of Interest Subvention on Housing Loan up to Rs.10 lakhs, provided the cost of unit does not exceed Rs.20 lakhs. Department of Financial Services has issued guidelines for implementation of the Scheme.

The objective of the Scheme is to provide Interest Subsidy on Housing Loan as a measure to improve affordability of housing to eligible borrowers and generate additional demand for credit. The Scheme will be implemented throughout the country and will be in operation for a period of 1 year beginning Oct 1, 2009 and upto Sept 30, 2010. Interest Subsidy of 1% will be applicable for first 12 months of eligible loans sanctioned and disbursed during the currency of the scheme viz. Oct 1, 2009 to Sept 30, 2010.

It will be implemented through the Scheduled Commercial Banks (SCBs) and Housing Finance Companies (HFCs) registered with National Housing Bank (NHB). The Reserve Bank of India (RBI) and NHB will be the nodal agencies for the Scheme for SCBs and HFCs respectively. After sanctioning and disbursing the eligible loans, the implementing agencies will claim disbursement of subsidy from respective nodal agency on monthly basis.

Guidelines

Calculation Sheet

Format for Interest Subvention Scheme

1. Format for Claiming Subsidy
2. Format for Utilization Certificate to be submitted by Implementing Agency
3. Format for Utilization Certificate to be submitted by Nodal Agency