Urban Housing Loan Scheme

URBAN HOUSING LOAN SCHEME

1. Short title,
Extent and
Commencement
This scheme may be called Urban Housing Loan Scheme to individual and members of house Building Societies by The Punjab State Cooperative Bank/Central Coop.Bank(s) in the State of Punjab.
(amended vide RCS Circular letter No.Credit/CA-2/HF/201/1/16240 dated 30.10.07)
The scheme shall be implemented through the branches  of the PSCB/Central Cooperative banks concerned and shall be limited to urban areas falling in the area of operation of the lending Bank.
(amended vide RCS Circular letter No.Credit/CA-2/HF/201/1/16240 dated 30.10.07)
It shall come into force from the date as the Registrar Coop.Societies, Punjab Chandigarh decides.
2. Purpose              Loan shall be advanced for the purchase of plot, purchase of built up house, construction of house or repair, renovation, additions, alteration, etc. in the existing house. Loans shall also be given for acquiring a plot, flat, house in an existing or proposed Cooperative House Building Society and approved scheme of PUDA, Housefed, Improvement Trust or any other Govt. Agency.
Loan can also be advanced for take over of an existing loan advanced by any other bank/financial institution subject to the condition that the loan account should have remained in the standard category of assets for atleast last 2 years in the previous financial institution.
(amended vide RCS Circular letter No.Credit/CA-2/HF/201/1/16240 dated 30.10.07)
3. Eligibility An individual residing in the area of operation of the Bank may apply for the loan in his individual name or along with another person being joint owner of the land/property as co-applicant. The applicant and co-applicant, if any will be enrolled as nominal members of the bank under the Act, Rules and Bye Laws.
Note : The Borrower should not have defaulted in any other loan.
The applicant shall be eligible for a total house building loan not exceeding 75% of the total cost of house (cost of construction + cost of plot, if plot is to be purchased) and the loan out of it for purchase of plot will not exceed 50% of the total loan sanctioned. The remaining, exceeding or upto 50% shall be utilized for construction of house thereon”.
The employees of the Punjab State Cooperative Bank or Central Cooperative Banks who have already availed house loan under Govt. or Bank Scheme from the Punjab State Coop. Bank or Central Cooperative Banks can also get loan under the scheme subject to maximum of Rs.25 lacs under both house loan scheme. It will be further subject to the repaying capacity of the employee in accordance with their last salary statement. Further this loan to employee will be against second charge on the said property.
(amended vide RCS Circular letter No.Credit/CA-2/HF/201/1/16240 dated 30.10.07)
4. Quantum of
Loan
The quantum of loan will depend upon the repayment capacity of applicant to be calculated by the bank as under :
  21 yrs. To 45 yrs of age.
48 times of the net monthly income (NMI) or 4 times of Net Annual Income (NAI)
Above 45 years
36 times of Net Monthly Income (NMI) or 3 Times of Net Annual Income (NAI)
Income of the spouse or family member can be considered if spouse or family member is co-applicant or guarantor. Maximum loan amount for construction of house or purchase of house/flat, purchase of plot + construction thereon under this scheme is Rs.25 lacs or 75% of total cost of construction, purchase of house (cost of construction + cost of plot, if plot is to be purchased), whichever is less.
The loan for purchase of plot will not exceed 50% of the total loan sanctioned.
For repair/renovation maximum amount of loan shall be Rs.1 lacs.
(amended vide RCS Circular letter No.Credit/CA-2/HF/201/1/16240 dated 30.10.07)
5. Interest Rate of interest shall be charged as fixed by the bank from time to time with quarterly rests. In case of default a penal interest @ 2% p.a. over and above the normal rate on the defaulted amount for default period shall also be charged.
(amended vide RCS Circular letter No.Credit/CA-2/HF/201/1/16240 dated 30.10.07)
6. Period of Loan/ 
Repayment of
Loan
Maximum period (including moratorium period) shall be 15 years or attaining the age of 65 years whichever is earlier. In case of repair/renovation /addition/alteration loan cases maximum period shall be 10 years.
Repayment of the loan shall, however, be in monthly equated installment to be started from 9 months after the first installment of loan disbursed. In case of the farmers availing loan under this scheme, repayment of loan may be in half yearly installments i.e. 30th June and 31st December every year.
(amended vide RCS Circular letter No.Credit/CA-2/HF/201/1/16240 dated 30.10.07)
7. Security Security for the loan is a first mortgage of the property to be financed normally by way of deposit of original title deeds.
(amended vide RCS Circular letter No.Credit/CA-2/HF/201/1/16240 dated 30.10.07)
8. Disbursal of
Loan
The loan shall be disbursed after the property is technically appraised, all legal documentation completed and borrower having invested own contribution in full (own contribution is the total cost of proposed property – Bank loan).
In case of purchase of plot + construction, the disbursement shall be in 3 installments as follows:-
For purchase of plot – 50%
Upto roof level          – 25% 
After roof level          – 25%             Loan will be disbursed at one go for purchase of a built up house. However, for construction on pre-owned plot, the disbursement shall be in two installments.
1st Installment for construction after plinth level – 50%
2nd Installment for construction of the building after roof level – 50%
Loan for repair, additions, alterations and renovation shall be disbursed in two equal installments. The second and subsequent installment of loan shall be disbursed only after ensuring the utilization of previous installment to Bank’s satisfaction. Bank shall not be bound to accept progress construction as assessed by builder.
(amended vide RCS Circular letter No.Credit/CA-2/HF/201/1/16240 dated 30.10.07)
9. Fee & Other
Charges
A processing fee @0.25% of the loan amount sanctioned will be charged.
(amended vide RCS Circular letter No.Credit/CA-2/HF/201/1/16240 dated 30.10.07)
10. Documentation
– Pre-sanction
Stage.
  1. Identify proof.
  2. Residential Proof.
  3. Self attested recent passport size photographs of the applicant and co-applicant (two).
  4. Copy of Income-tax Return for the three years duly acknowledged by ITO concerned.
  5. Sources of Finance for own contribution.
  6. Non-encumbrance certificate.
  7. Search report & legal opinion alongwith photograph of the property.
  8. Original title deed.
  9. Spot Physical verification.
  10. Purchase agreement of property.
  11. Income Proof/J-Form.
  12. Loan application Form
 
11.Post – Sanction Stage
  1. Loan agreement.
  2. Demand Promissory Note.
  3. Mortgage Deed
  4. Letter of Lien and Set Off
  5. Letter of Waiver
  6. Letter of Guarantee
Employed applicants :
Undertaking from the employee under section 39 of Punjab Cooperative Societies Act, 1961.
(amended vide RCS Circular letter No.Credit/CA-2/HF/201/1/16240 dated 30.10.07)
12. Insurance Comprehensive insurance in the joint names of the borrower and the bank shall be made of the property mortgaged against fire, riots earthquake lighting floods etc. Incase of default bank will be at liberty to get a policy renewed by debit to house loan account of the borrower.
13. Additional Doc-
uments in
construction 
cases
  1. Construction Plan approved by a competent authority.
  2. Detailed Cost estimate from Registered Architect/ Civil Engineer.
  3. A photocopy of registered title deeds or allotment letter (in case of member of Cooperative House Building Societies)
14. In purchase of
Built Up House   
cases.
  1. Agreement of sale/sale deed/detailed cost estimate from approved engineer.
  2. In case of allotment of flat/houses, photocopy of allotment letter and details of balance payment, if any.
15. Disputes If at any stage any dispute arises,it will be settled/referred under the Punjab Cooperative Societies Act 1961.