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NATIONAL HOUSING BANK
Home Loan Account Scheme (HLAS)
This scheme of NHB requires the borrower to first of all start a saving of a minimum of Rs. 30 per month. The savings (at a pro rate minimum) could also be done at quarterly, half-yearly or annual intervals. The minimum period for which the savings must be accumulated before the account holder becomes eligible for a loan under the HLAS is five years. The savings would earn interest at the rate of 10% per annum. The loan that can be obtained on the completion of the saving period depends upon the built up area of the accommodation.
Built-up Area of Accommodation Ceiling on Loan Amount
Upto 430 sq. ft Four times the amount saved
Upto 860 sq. ft Three times the amount saved
Exceeding 860 sq. ft Twice the amount saved
While sanctioning the loan, the repayment capacity of the account holder is also assessed. In the normal course, the amount of loan will not exceed 2.5 times the annual income of the account holder. It should also be possible for him to repay the entire loan within the stipulated maximum repayment period of 15 years.
The ceiling limit on the loan which was specified earlier at Rs.3 lakhs has been removed. However, in the case of loans exceeding Rs.2 lakhs, the amount will be limited to 1.5 times the accumulated savings.
The scheme provides that the amount accumulated in the HLA can be set off against any margin requirement for a housing loan either under this scheme, or any other housing loan scheme. Part of the amount accumulated in the home loan account can also be withdrawn to pay registration fees for specific schemes or for purchase of a plot allotted by a public agency or co-operative housing society. Such payments will be made by the bank directly to the agency concerned.
After having opened a loan account and agreed to save a stipulated amount per month, quarter, or year, the account holder can vary this amount when the finds it necessary. If the account holder has saved for a period longer than 5 years, the accumulated savings which will be considered for the purpose of calculating the amount of loan to which he will be eligible will be the actual account to the credit of his account when he desires to take the loan plus any amount which he has already withdrawn for the purpose of registration or to pay for the cost of the plot allotted to him by any approved agency.
The fact that the account holder has availed a loan under this scheme does not bar him from taking loan from a bank or any other source such as his employer, a co-operative society or any other housing agency, provided such loan is meant to pay for the balance cost of the house or flat being financed under the scheme. While the HLAS is quite flexible in respect of the sources from which the account holder tries to finance the house acquisition, the scheme cannot be used for acquisition of more than one house by the account holder.
The house or flat acquired or built with the loan obtained under the scheme cannot be sold for five years after completion or till the entire loan is repaid, whichever is later. Relaxation of this condition may be made by the NHB in case of dire distress, subject to such conditions that the bank may stipulate as it deems fit.
The saving instalments under HLAS provide a tax rebate of 20% under section 88A of the Income – Tax Act. Tax rebate is also available on amounts used to repay the principal of the loan given under the scheme. The payment of interest on the loan will be allowed in full as a deduction under section 24 of the Income – Tax Act, provided the borrower does not stay in the house himself, in the case of an owner occupied house, deduction only to the extent of Rs.5,000 per annum towards interest will be allowed.
HLAS launched by NHB on 1st July, 1989 is implemented by all the 28 public sector banks’ 24 scheduled commercials banks in the private sector, 5 scheduled state co-operative banks and 8 scheduled urban co-operative banks. Regional Rural Banks can operate the scheme as agents of their respective sponsor banks.
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