The real estate sector has begun to attract the renewed interest of homebuyers with the government’s focus on affordable housing, financial sector behemoth HDFC Ltd said on Sunday.
A day after being awarded by Prime Minister Narendra Modi at a function as the best performing primary lending institution in the credit linked subsidy scheme for EWS and LIG homebuyers, the housing finance major said it is enthused by the government’s focus on affordable housing through various initiatives.
HDFC was also adjudged as the second best in the Middle Income Group (MIG) category under the government’s flagship scheme ‘Pradhan Mantri Awas Yojana (PMAY)’.
HDFC Managing Director Renu Sud Karnad, who received the award from the Prime Minister in presence of Union Home Minister Rajnath Singh and Uttar Pradesh Chief Minister Yogi Adityanath, among other leaders, said the credit for HDFC’s success goes to the support it received from Ministry of Housing and Urban Affairs and the National Housing Bank.
“The government has laid extraordinary focus on affordable housing with the launch of PMAY. Urbanization in India has been increasing at a rapid pace. By 2030 it is estimated that half of India’s population will be residing in urban India which implies more demand for housing,” Karnad said.
“This impetus given to increase home ownership by the government has been unprecedented. This has renewed the interest of homebuyers in the Indian real estate sector and allowed first time home buyers to avail more benefits to own a house,” she added.
HDFC has helped over 44,000 beneficiaries to avail the benefits under Credit Linked Subsidy Scheme (CLSS), she said.
HDFC said in order to educate customers about the benefits of these schemes it has been conducting seminars, presentations and other events.
In support of the government’s flagship scheme, HDFC Ltd during the year ended March 31, 2018 approved 38 per cent of home loans in volume terms and 19 per cent in value terms to customers from the EWS and LIG segment.
HDFC Ltd on an average has been approving 8,200 loans on a monthly basis to the EWS and LIG segment, with monthly average approvals at approximately Rs 1,312 crore.
CLSS was introduced in June 2015 under Pradhan Mantri Awas Yojana (PMAY) for home loans to customers from the Economically Weaker Section (EWS), Low Income Group (LIG) and was extended to Middle Income Group (MIG) from April 2017.
As per the scheme, eligible borrowers will get interest rate subsidy of 6.5 per cent per annum for loans up to Rs 6 lakh for EWS and LIG category (annual household income up to Rs 6 lakh) and interest subsidy of 4 per cent and 3 per cent for loans up to Rs 9 lakh and Rs 12 lakh respectively for MIG category (annual household income between Rs 6-18 lakh) for a maximum tenure of 20 years.
The effective subsidy to customer is in the range of Rs 2.30-2.67 lakh on a 20-year term receivable upfront. The schemes for MIG are valid up to March 31, 2019, and for EWS/LIG up to March 31, 2022.