The absence of a dedicated institution for long-term financing of individual housing has been a longstanding issue in India. Recognizing this as a major obstacle impeding the growth of the housing sector, the Sub-Group on Housing Finance for the Seventh Five Year Plan (1985-90) identified the need for a central institution at the national level to address this challenge. Consequently, the recommendation was made to establish the National Housing Bank (NHB) as the nodal organization to cater to this crucial aspect The annual report of the National Housing Bank loan provides valuable insights into the interest rates and loans available in the affordable housing sector.
The organization known as the National Housing Bank (NHB)
The Indian Government approved the suggestion put forth by the sub-group of the planning commission. Additionally, a High-Level Group led by Dr. C. Rangarajan, who was the Deputy Governor of RBI at the time, was established to assess the proposal. The esteemed group recommended the establishment of the National Housing Bank (NHB) as an independent institution specializing in housing finance. The Government accepted this recommendation.
On February 28, 1987, during the presentation of the union budget, the esteemed Prime Minister of India announced the establishment of the National Housing Bank (NHB) as a leading institution for housing finance.
Subsequently, the process of legislating and passing the NHB bill commenced, culminating in its approval during the winter session of 1987. In December of the same year, it officially became an Act of Parliament. The National Housing Policy, established in 1988, outlined the creation of NHB as the premier housing institution. These concerted efforts led to the establishment of NHB on July 9, 1988, under the NHB Act of 1987. Notably, NHB is fully owned by the Reserve Bank of India, which contributed the complete paid-up capital.
Historical Evolution
The introduction of the National Housing Bank Act, 1987 outlines the fundamental responsibilities of the NHB as follows: “The NHB serves as a primary entity to foster housing finance institutions at local and regional levels, offering financial assistance and other forms of support to these institutions. It also addresses related matters and associated aspects.”
| Institution | Official Site | Apply Link | Rate | Eligibility | Required Documents | Apply Charge | Processing Time |
|---|---|---|---|---|---|---|---|
| National Housing Bank | Official Website | Apply Here | Varies | Varies | Varies based on the loan product | Varies based on the product | Varies based on the loan product |
(a) Promoting, establishing, supporting, or assisting in the promotion, establishment, and support of housing finance institutions.
(b) Providing loans, advances, or any other form of financial assistance to housing finance institutions and scheduled banks. This also includes providing assistance to any authority established by or under any Central, State, or Provincial Act involved in slum clearance.
(d) Guaranteeing the financial obligations of housing finance institutions and underwriting the issuance of stocks, shares, bonds, debentures, and securities of housing finance institutions of all kinds.
(h) Developing one or more schemes to mobilize resources and extend credit for housing purposes.
(i) Creating one or more schemes specifically aimed at economically weaker sections of society, which may receive subsidies from the Central Government, State Governments, or any other funding sources.
| Field | Information |
|---|---|
| Official Site Link | National Housing Bank Official Website |
| Apply Link | Apply Here |
| Rate | The rates may vary depending on the type of loan and your eligibility. Please refer to the official website or directly contact the bank for the most accurate information. |
| Eligibility | Applicants must be residents of India, aged 18-70 years, with a steady source of income. Other eligibility criteria may apply depending on the specific loan or service. |
| Documents | 1. Identity Proof (Aadhar Card, Voter ID, etc.)<br> 2. Address Proof<br> 3. Income Proof (Salary slips, Tax Returns)<br> 4. Property Documents (if applicable) |
| Apply Charge | Application charges can vary. Please check the official website or directly contact the bank for precise information. |
| Processing Time | Usually, it takes around 7-15 working days for the loan to be processed. However, the actual time can vary based on individual circumstances. |
The activities conducted by the National Housing Board (NHB) encompass the subsequent tasks:
The operations of the National Housing Bank (NHB) encompass the following:
- Mobilizing funds from diverse sources, including the general public.
- Refinancing various Primary Lending Institutions.
- Offering Project Finance under Section 14 (ba) of the NHB Act, 1987, to public entities such as State Housing Boards, State Slum Clearance Development Municipal Corporations, Urban Local Bodies, etc.
- Registering, regulating, and supervising Housing Finance Companies (HFCs).
- Providing equity participation to various HFCs.
- Acting as the nodal agency for government schemes, participating in them.
- On October 1, 2009, NHB introduced a 1% interest subvention scheme.
The National Housing Bank (NHB) has been appointed as a nodal agency for the Urban Poor (ISHUP) program, as well as for the implementation and oversight of the Capital Subsidy Scheme for the installation of solar water heating and solar lighting systems in households. Additionally, the program has been renamed as Rajiv Rinn Yojana (RRY).
Introduction
The purpose of this scheme is to offer refinancing assistance to Scheduled Commercial Banks (SCBs) for the purchase, construction, repairs, and upgrading of housing units. Please note that the rules and policies outlined in this brochure apply only to future refinancing under this scheme and not to any previous refinancing obtained by SCBs under old schemes annual report of the National Housing Bank loan provides valuable interest rates and loans available in the affordable housing sector.
Eligibility Criteria
Scheduled Commercial Banks (SCBs) that meet the following criteria will be eligible to receive refinancing from NHB:
- (a) The Net Non-Performing Assets should not exceed 5% of the Net Advances for the entire bank portfolio.
- (b) The Capital Adequacy Ratio should comply with the norms prescribed by the Reserve Bank of India.
- (c) The bank should have been profitable for the last two years.
| Field | Information |
|---|---|
| Official Name | National Housing Bank |
| Established | 9th July 1988 |
| Parent Organization | Reserve Bank of India (RBI) |
| Act under which Established | National Housing Bank Act, 1987 |
| Official Website | National Housing Bank Official Website |
| Services Offered | Refinancing for housing finance companies and scheduled banks, direct finance to approved bodies or authorities, regulation and supervision of Housing Finance Companies (HFCs), etc. |
| Eligibility for Services | Varies by service; typically, applicants must be residents of India, aged 18-70 years, with a steady source of income. Additional criteria may apply based on the specific service. |
| Required Documents | 1. Identity Proof (e.g., Aadhar Card, Voter ID)<br> 2. Address Proof<br> 3. Income Proof (e.g., Salary Slips, Tax Returns)<br> 4. Property Documents (if applicable) |
| Application Process | Applications can be made through the Online Application Portal. Charges and processing times can vary. |
| Description | The National Housing Bank (NHB) is a wholly owned subsidiary of the Reserve Bank of India (RBI) and was set up on July 9, 1988, under the National Housing Bank Act, 1987. It is an apex level financial institution for housing. NHB has been established with the purpose to operate as a principal agency to promote housing finance institutions both at local and regional levels and to provide financial and other support to such institutions. |
Eligible Loans
The following direct and indirect loans will be eligible for refinancing from NHB:
- (a) Direct housing loans up to Rs. 50 lakhs disbursed by the bank to individuals.
- (b) Indirect term loans disbursed by the bank to the following categories of Primary Lending Institutions (PLIs) that provide housing loans to individuals:
- Housing Finance Companies (HFCs) registered with NHB.
- Apex Cooperative Housing Finance Societies (ACHFS).
- Agriculture and Rural Development Banks (ARDBs) for rural housing loans.
(c) Indirect term loans extended to support the supply side of housing, specifically for the construction of individual dwelling units, and lent to:
- Housing Boards.
- Public Housing Agencies.
- Private Builders and Developers.
Interest Rates
4.1 Financial assistance under this scheme will be provided at either fixed or floating interest rates. SCBs can choose the interest rate structure that suits their requirements. The interest rate charged to the SCB will be the prevailing rate on the date of disbursement, based on the housing loan amount and the chosen repayment period. NHB may periodically revise the interest rates, and any changes will be communicated accordingly.
- 4.2 Conversion of Fixed Rate Loans to Floating Rate and Vice Versa
If an SCB wishes to convert outstanding loans from a fixed rate structure to a floating rate or vice versa, the following rules will apply:
-
For converting from fixed to floating rate of interest, a levy of 0.50% of the outstanding loan amount will be imposed. The applicable interest rate will be the prevailing floating rate for the remaining repayment period.
-
If SCBs choose to convert loans from floating to fixed rate of interest, a levy will be charged as specified for prepayment. The applicable interest rate will be the prevailing fixed rate for the remaining repayment period.
-
Conversions will only be allowed on January 1 and July 1 of each year. Requests for conversions must reach NHB one month prior to the effective conversion date.
4.3 Revision in Interest Rate on Fixed Rate Loans
For refinance outstanding at fixed interest rates, NHB reserves the right to revise the rates after 3 years. The revised rate will be effective from the quarter following the completion of 3 years. The applicable interest rate will be the prevailing fixed rate for the original repayment period. If the revision results in an upward change, the SCB can choose to continue with the revised rates or prepay the outstanding balance without any prepayment levy. In the case of a downward revision, prepayment will be allowed only if the applicable prepayment levy is paid annual report of the National Housing Bank loan provides valuable interest rates and loans available in the affordable housing sector.
| Sr No. | Form No. | Nature of Statement | Periodicity | Due Date |
|---|---|---|---|---|
| 1. | ROD-SCB-AR-01 | Annual information | 31st March | To be submitted by 31st August |
| 2. | ROD-SCB-AR-02 | Annual auditor’s certificate | 31st March | To be submitted by 31st August |
| 3. | ROD-SCB-AR-03 | Annual statistical information | 31st March | To be submitted by 31st August |
Term of Refinance
Refinancing will be repayable within a period of not less than one year and not exceeding 10 years. SCBs have the flexibility to choose the repayment period according to their requirements. Principal repayment and interest payments will be made on a quarterly basis. Principal repayment will begin after one clear calendar quarter
Early Repayment
Upon obtaining refinancing from NHB, the SCB has the option to repay the entire amount or a portion of it before the scheduled due date. To do so, the SCB must provide a two-month notice to NHB indicating its intention to make an early repayment. In the event of early repayment, NHB will impose a prepayment charge, as outlined below:
annual report of the National Housing Bank loan provides valuable interest rates and loans available in the affordable housing sector, annual report of the National Housing Bank loan provides valuable interest rates and loans available in the affordable housing sector
| Residual Maturity | Fixed Interest Rate | Floating Interest Rate |
|---|---|---|
| Less than 5 years | 0.5% of amount to be prepaid | 0.5% of amount to be prepaid |
| 5 years and above | 1% of amount to be prepaid | 0.5% of amount to be prepaid |
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A: The National Housing Bank (NHB) is a government-owned financial institution in India that was established in 1988 under the National Housing Bank Act. It serves as the apex institution for promoting and regulating housing finance activities in the country.
A: The National Housing Bank plays a crucial role in the Indian housing finance sector. Its primary functions include:
Providing financial and technical assistance to housing finance institutions.
Promoting and developing new housing finance institutions.
Regulating and supervising housing finance companies.
Formulating and implementing policies to support affordable housing.
Acting as a central repository of information on the housing sector.
Conducting research and promoting best practices in housing finance.
A: Yes, the National Housing Bank is a government-owned institution. It was set up by the Indian government as a wholly owned subsidiary of the Reserve Bank of India (RBI). However, in 2019, the RBI decided to transfer its entire stake in the NHB to the government, making it a fully government-owned entity.
annual report of the National Housing Bank loan provides valuable interest rates and loans available in the affordable housing sector
