Rural Housing Loan Scheme

Rural Housing Loan Scheme

Latest Rate of interest on various loans are as under :

Preamble With a view to provide housing facilities to the masses which is a basic need of human beings, the GOI and State Govt. are attaching utmost importance to the financing of housing sector. Several housing schemes for this are in operation. With a view to supplement these schemes, it has been decided by the Coop. Bank to start housing finance for acquisition, construction, repair/alteration etc. This scheme has particularly been designed for rural people, where other financing institutions are reluctant to advance.  The scheme shall be called the “Scheme for Financing Rural Housing” and is applicable to individual/members of house building cooperative societies in the state of Punjab and Chandigarh(U.T.)
(amended vide RCS Circular letter No.Credit/CA-2/HF/201/1/16264 dated 30.10.07)
   
1. Area of Operation Loan shall be advanced to individual and member of Group Housing Cooperative Societies in the area of operation Banks in the state of Punjab and Chandigarh U.T.
(amended vide RCS Circular letter No.Credit/CA-2/HF/201/1/16264 dated 30.10.07)
   
2. Eligible Borrower
  • Individuals
  • Cooperative Housing Societies
   
3. Purpose of Loan Loan shall be advanced under the scheme for purchase of built up house, construction of a new house or repair/ renovation/addition/alteration of existing house in rural areas.
(amended vide RCS Circular letter No.Credit/CA-2/HF/201/1/16264 dated 30.10.07)
   
4. Ceiling on the cost The loan for a dwelling unit may not exceed Rs.15.00 lacs. In case land is being acquired the cost of land may be reckoned as margin money, otherwise cost of land should not be included in the project cost.
(amended vide RCS Circular letter No.Credit/CA-2/HF/201/1/16264 dated 30.10.07)
   
5. Quantum of Bank
loan for Individual
The quantum of loan shall depend upon repaying capacity of the borrowers, subject to 85% of cost of construction or value of property to be purchased.
For construction/purchase of new House
  • maximum loan – Rs.15.00 lacs
  • Margin Money –  15%
  • Repayment period – Upto 15 years in monthly/half yearly installments. Due date shall be 30th June and 31st December every year.
  For Renovation/Repair/Addition/Alteration:
  • Maximum loan – Rs.1 lacs (for repair/ addition /alteration of House)
  • Margin money – 15%
  • Repayment period – 10 years in monthly/half yearly installments.
Loan eligibility shall be calculated on the basis of repayment capacity of the borrower. The repaying capacity shall be determined on the basis of land holding and other known sources of income and commitments/subsistence towards his family. A reasonable installment to income ratio i.e. normally upto 35% of the gross income can be taken as repayment capacity of the borrower. Income of the co-applicant can also be considered for loan eligibility.
(amended vide RCS Circular letter No.Credit/CA-2/HF/201/1/16264 dated 30.10.07)
6. Period of Loans The maximum period of loan shall be upto 15 years and loan shall be repayable in equated monthly/half yearly installments. The first installment shall become due after expiry of 9 months from the date of drawl of first installment in case of construction and whereas in case of purchase of built up house, it shall start after expiry of 3 months from the date of purchase.
   
7. Rate of Interest Interest rate of Rural Housing shall be determined by financing bank from time to time and debited to loan account. Penal interest @ 2% over and above the normal rate shall be charged in case of default, on the default amount for the default period.
(amended vide RCS Circular letter No.Credit/CA-2/HF/201/1/16264 dated 30.10.07)
   
8. Security The security of the loan shall be first mortgage charge on the house property to be financed by the bank by way of registered regular mortgage. In addition to it collateral security shall be taken @ 100% of the loan amount in the form of agriculture land. Value of agriculture land as per norms fixed by the District Collector from time to time should be taken into consideration. In case of employees of the Govt., semi govt., Boards, Corporation, etc., constructing house within rural areas, loan can be advanced on primary security i.e. mortgage of house to be financed, alongwith two good sureties and undertaking under section 39 of Punjab Cooperative Societies Act., 1961.
(amended vide RCS Circular letter No.Credit/CA-2/HF/201/1/16264 dated 30.10.07)
9. Sanction and
disbursement of
Loan
The loan shall be sanctioned after it is ascertained that the applicant fulfils all the requirements and enjoys reputation as a good pay master. For construction loan, the borrower should be in possession of plot with unquestionable and indisputable title. In case of built up house, the payment shall be made @ 75% of total value of the house/Loan sanctioned. Payment shall, however, be made to third party in lump sum after getting margin money from the borrower and remaining 25% shall be relased after obtaining Mortgage Deed in favour of the Bank. For construction of house, loan shall be disbursed in 2 installments, which is as under:-
  • 1st installment at the time of starting       50%
  • 2nd installment after completion upto      50%
Roof level.
2nd installment shall be disbursed after ensuring proper utilization of previous installment.
   
10. Processing Fee &
Other Charges
Processing Fees and other charges @ 0.25% of loan amount shall be charged.
(amended vide RCS Circular letter No.Credit/CA-2/HF/201/1/16264 dated 30.10.07)
   
11. Documentation &
general
requirements.
Following documents are required for financing under Rural Housing Scheme :-
  • Application form
  • Loan Agreement.
  • D.P.Note
  • Two latest attested passport size photographs of the borrowers.
  • Proof of residence.
  • Source of Finance for own contribution.
  • Copy of approved drawing of the proposed dwelling unit to be constructed/purchased from Sarpanch/ Numberdar.
  • Agreement of sale deed.
  • Details of cost/estimate from approved Architecture/ Valuer/ Engineer of the house to be purchased/ constructed /renovated /addition to be made.
  • Non-encumbrance certificate.
  • Latest Jamabandi and Girdawari.
  • Certificate of ownership of land/property situated within Red Line (i.e. Phirni) of the village from the Sarpanch/Numberdar/Partwari.
  • The borrower shall mortgage his existing property : to be constructed/purchased in favour of the bank for the full value of loan.
  • The borrower shall be required to submit collateral security @ 100% of the loan amount.
Additional Documents from Employees:
  • Salary Certificate.
  • Undertaking U/S 39
  • Post Dated Cheques
  • Completion Certificate.