HFCs which avail home loans for the urban poor

By Accommodation Times News Services

Affordable Homes - What They Are And What They're NotThough government has announced target of Housing Mission for urban poor, but there are very few housing finance companies which avail home loans to urban poor. Low-income home buyers who are seeking easy home loans for buying affordable homes, but they are usually disappointed with the response they get from HFCs.

Still there are certain HFCs which work for poor people, one of such is MHFC is focused on providing micro-mortgages to the urban poor, specifically those employed in the informal sector. Through this initiative, MHFC seeks to efficiently and sustainably enable access to housing finance services to the underserved and un-served segments of the urban population. MHFC received its license from its regulator, the National Housing Bank (NHB).

They seek to provide housing loans to lower-income group individuals living and working in the informal sector in urban India. Their customers are a mix of self employed micro-entrepreneurs (e.g. vegetable vendors, barbers) and un-organized sector salaried workers (e.g. drivers, housemaids), earning combined household incomes of between Rs. 8,000 and Rs. 25,000 per month.

Another such bank is the Mumbai-headquartered Aadhar Housing Finance Limited (AHFL) company has come up with a new home loan scheme for the low income group whereby the borrowers will not have to furnish income proof documents to avail housing loan.

The housing finance company recently announced a new scheme that would strengthen finance options to the “self-employed professionals in the economically weaker and Low Income Group segments in the urban areas and towns”.

Under the scheme, small business owners, self-employed individuals or artisans engaged in retail trade, skilled job, manufacturing and services with limited capital investment with a monthly income between Rs.5,000 and Rs.30,000 would qualify for the loan.

The low-income earning individuals are not eligible for accessing loans from big banks and financial institutes due to lack of documentations and guaranties for recovering the loan. For such individuals thes banks are a blessing.

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