Indian Government Schemes

Study Notes

A home loan, also known as a housing loan, is a loan provided by financial institutions to individuals or families for purchasing new or old houses or constructing residential properties.
It allows borrowers to acquire a property by providing a portion of the purchase price upfront and repaying the remaining amount, plus interest, over a specified period.
Home loans typically have lower interest rates compared to other forms of borrowing, making them an attractive option for aspiring homeowners.

Purpose: Suraksha is given for the purpose of purchase and/or construction of residential properties to individuals with formal income proof.
Segment: Salaried/Self-employed Professionals, NRIs, Partnership firms/LLP, Private Limited companies, Closely Held Public Limited company, Association of Persons, Corporate Body, HUF, Trust/Society.
Formal Income proof includes:
- Salary slips/certificate of last 3/6 months (for salaried class) reflecting PF deduction and/or Form 16.
- Profit & Loss Accounts and Balance Sheets (for business class).
- IT returns filed in respective years showing sufficient income.

Purpose: Internal/external repairs and structural improvements of existing residential units.
Repair includes:
- Plastering/painting of walls.
- Flooring.
- Roofing.
- Bathroom plumbing.
- Tile work.
- Construction of kitchen platform.
- Electrical fittings.
Income Proof: Formal proofs as defined in SURAKSHA, Appraised Income Working as elaborated in SUVIDHA.
Eligibility parameters:
- Minimum Income: Rs. 8000/- p.m.
- Maximum Loan Amount: Rs. 10 Crore.
- Minimum Loan Amount: Rs. 1 Lakh.
- Maximum Loan Tenure: 30 years.
- Minimum Loan Tenure: 1 year.
- Maximum FOIR (%): As per DOP grid mentioned in CAAM.
- Maximum LTV (%): As per DOP grid mentioned in CAAM but not more than 80% (for some categories) and 75% (for other categories).
- Age of Applicant: Minimum age 18 years (Non-financial Coapplicant) and 21 years (Financial Coapplicant).
- Maximum age at the time of loan maturity: 75 years (For Financial Coapplicant) and 90 years (For Non-financial Coapplicant).

FOIR (Fixed Obligation to Income Ratio) is the ratio of customers' fixed commitment to income.
It is calculated by considering the other fixed obligations of the customer which are currently due.
The institution assumes that the borrower can pay a maximum EMI of 35% to 45% of their monthly income.

Loan to Value Ratio (LTV) is used to calculate loan eligibility based on the market value of the property.
LTV is calculated by dividing the loan amount by the market value of the property.
For example, if the loan amount is Rs. 20,00,000 and the market value of the property is Rs. 30,00,000, the LTV ratio would be 66.67%.