NHB & World Bank are initiating fund flow programme for low cost housing

By Accommodation Times News Services

logo of NHBNational Housing Bank has, in partnership with World Bank through Government of India, initiated a program to encourage the flow of funds to the urban poor for their housing requirements. Under the program NHB will be receiving loan of $100 million (approx.) over a period of five years from World Bank which will be used to refinance the retail loans extended by the Primary Lending Institutions (PLIs) which conform to the criteria laid down under the program.

The project has three components which are (I) Capacity Building of the National Housing Bank (NHB), Qualified Intermediary Institutions, and Qualified Primary Lending Institutions (QPLIs), (II) Financial Support for Sustainable and Affordable Housing for NHB to refinance, directly or indirectly through Qualified Intermediary Institutions, low-income housing loans made by QPLIs to Primary Borrowers to purchase, build or upgrade their dwelling, and (III) Project Implementation. Following are the essential criteria prescribed under the program:

1. Annual Income of the Household to be less than or equal to Rs. 200,000

2. The loan size must be less than or equal to Rs. 500,000

3. Loan to Value ratio to be less than or equal to 80%

4. The Dwelling Unit (DU) must be in urban area

5. No loan for plot purchase shall be eligible

The loans must meet the Social and Environment Due Diligence standard set by the programme (as per annexure). The allocation of the funds of the programme has been divided on the basis of formality of income and property and is reflected as follows:

Formal Dwelling

Informal Dwelling

Formal Sector Income

Secured loans for home purchase or

construction to salaried borrowers.

Loans secured using alternative

collateral for home purchase or

construction to salaried borrowers

Informal Sector Income

Secured loans for home purchase or

construction to informal sector

borrowers.

Loans secured using alternative

collateral for home purchase or

construction to informal sector

borrowers.

 

Under the programme, pilot programme will be run to discover the ways through which credit delivery through formal means could reach to household having informal title to the property. NHB has claimed $4.85 million under the programme in the first claim and is currently in process of claiming the second tranche of the funds.





Similar Articles

Leave a Reply

Top