1

Objective

• The Department of Financial Services (DFS) and select member Banks along-with IBA had jointly deliberated to formulate a Home Loan scheme for facilitating Housing Loans to Individuals in the Economically Weaker Section (EWS), Low Income Group (LIG), and Middle-Income Group (MIG) categories, with regular source of income with minimal or nil documented income or income proof but have digital footprints of banking and other economic activities

2

Eligible Customers

• Individuals with a source of income either having minimal or no documented income or income proof but have digital footprints of banking and other economic activities
• Eligible customers in Metro / Urban areas includes:

» Small traders, shopkeepers, Skilled and Semi-Skilled workers/ artisans in unorganized sector

» Members of SHGs, beneficiaries of PM SVANidhi, PM Vishwakarma, Mudra, Stand Up India

» All beneficiary groups under PMAY-U 2.0

(In case the borrower is eligible for Interest Subsidy under PMAY (U) 2.0, Branches to ensure compliance of conditions under PMAY(U) 2.0 scheme. In such case loan shall be sanctioned only by Branches identified as Nodal under the scheme. Branches to be guided by Circular Issued on "IOB Gharonda 2.0 Scheme" and updations from time to time if any.)

3

Eligibility

• Individuals / Applicant/s with annual income up to Rs.9.00 lakhs having no home or one Home
• Credit worthiness to be ascertained, CIC report to be drawn and perused for adverse feature if any
• A satisfactorily maintained Running Bank Account / UPI transaction history for a minimum period of 24 months

4

Annual Income

• Total annual income of applicant (s) (maximum 4) should not exceed Rs. 9.00 lakhs

(Income of up to 4 members of the household can be combined to calculate eligibility)

EWS: Households having income upto Rs. 3.00 Lakhs

LIG: Households having income above Rs. 3.00 Lakhs and upto Rs. 6.00 Lakhs

MIG: Households having income above Rs. 6.00 Lakhs and upto Rs. 9.00 Lakhs

5

Eligible Income for arriving at maximum loan amount

Any one of the following

• Salaried customers: If Salaried and receiving salary through Bank Account (SB / CA), the average annual salary credit will be taken as annual income

(Average for last 12 months)

(One off credit, which are not regular in nature, to be removed from credit summation)

• Self-Employed customers:

a. Self-employed individuals maintaining Account (Current / CC / SB) in the name of the Firm or in his personal name) but NOT Linked to UPI / POS, 8% of annual credit summation will be taken as Annual Income

(Average for last 12 months)

Or

b. Self-employed with UPI / POS linked to SB / CA / CC in the name of the firm or in his personal name through which the business transactions are routed, 20% of total credit summation of digital transactions will be taken as Annual income

(Average for last 12 months) income considered for eligibility will be higher of (a) or (b) above

c. If the applicant is assessed under GST, then 8% of their Sales Turn Over declared in the GST returns will be considered as Annual Income

(Section 44AD, income is computed on presumptive basis at the rate of 8% of the turnover or gross receipts of the eligible business for the year)

(One off credit, which are not regular in nature and non-indicative of income from business, may be removed from credit summation)

6

Age of Entry

• Minimum Age: 21 years
• Maximum Age: 60 years

7

Purpose

• To purchase / construct of a new house / flat, to purchase an existing house / flat or extend an existing house, Repair / Renovate an existing house / flat

8

Eligible Property / Security

• Equitable or Registered Mortgage of Residential Property financed

(If underlying security is non-mortgageable, alternate SARFAESI compliant security may be accepted only in case of self-constructions.

However, as best possible, it should be ensured the House Property for which the Loan is being sanctioned under this scheme, is SARFAESI Compliant)

9

Layout/ Construction Plan

• For Home Loan:

Layout / Construction plan approved by the Competent Authority

• For Repair & Renovation:

Estimate by approved engineer / architect (Panel Valuer) will be required. Branches to comply with extant guidelines on Valuation

10

Maximum No. of Co-borrowers

• Applicant with spouse and earning children

(Maximum - 4)

• Income of all co- borrowers shall be added to arrive at EMI / NMI ratio / assessment of loan amount

11

KYC

• As per extant RBI guidelines

12

Maximum Loan Amount

• For Home Loan:

Metro Centres: Rs 35.00 Lakhs, subject to Max Project Cost of Rs. 45.00 Lakhs

Other Centres: Rs 25.00 Lakhs, subject to Max Project Cost of Rs. 30.00 Lakhs

(The project cost would mean, overall cost/value of the dwelling unit post completion)

• For Repair and Renovation:

Metro Centres: Rs.10.00 Lakhs

Other Centres: Rs. 6.00 Lakhs

• Loan amount will be lowest of the following:

a. Permissible loan amount as per EMI / NMl ratio

b. Permissible loan amount as per LTV ratio

c. Loan amount applied

d. Maximum permissible loan amount under the scheme

13

LTV Ratio

• As per extant RBI Guidelines

14

EMI / NMI Ratio

• Annual Income Upto Rs. 3.00 Lakhs: Maximum 30%
• Annual Income Above Rs. 3.00 Lakhs & up to Rs. 6.00 Lakhs: Maximum 55%
• Annual Income Above Rs. 6.00 Lakhs & upto Rs. 9.00 Lakhs: Maximum 60%

15

Rate of Interest

*RLLR: 8.85% at present

16

Credit Guarantee

Credit Guarantee Cover will be available for

• Home Loans granted to borrowers under EWS (annual household income up to Rs. 3.00 lakhs) and LIG category (annual household income up to Rs.6.00 lakhs) only
• Property in Urban area as defined under PMAY-U scheme
• Houses with Carpet Area up to 60 sq mtr / 645.83 Sq. Ft.
• Purchase / Construction for first house only and not for the house in different city or for subsequent houses or improvement of the existing house

17

End Use of Funds

• Stage wise disbursement to be done in case of construction
• Obtention of utilisation certificate from the empanelled Valuer before disbursement of last tranche (30%) of loan to be ensured

18

Repayment Period

• Maximum: 25 years (300 months) subject to full repayment before the youngest earning borrower attains the age of 70 years

19

Moratorium

• Up to 12 months in all eligible cases of self-construction of House
• Builder Flats - Construction linked, but not more than 36 months
• Purchase of ready to move house/ Flat: No moratorium

(However, wherever House need some finishing / furnishing work such as paint / minor repairs etc, maximum moratorium of 3 months may be provided)

(Interest to be serviced during the moratorium period)

20

Property Insurance

• Compulsory insurance of House / Flat against risk of fire, lightning, riots, earthquake, floods etc.
• Insurance premium to be borne by the applicant

21

Prepayment Charges

• No pre-payment charges will be levied for floating interest rate based loans as per extant guidelines