RBI’s new draft rules to boost housing finance and spur home buying

A number of changes in rules governing HFCs, brought in by RBI will bolster housing finance and push home buying.

As per RBI’s new draft rules, at least 75% of half of HFCs net assets should be individual housing loans. The new rules have also done away with prepayment penalties for floating rate loans. The new rules have also clearly defined housing finance and providing finance for housing. It involves financing for purchase, construction, reconstruction, renovation or repairs of residential units. The new draft guidelines are a sequel to RBI taking over as regulator of mortgage loans from NHB.

Says Mr. Pradeep Aggarwal, Founder & Chairman, Signature Global Group and Chairman, Assocham National Council on Real Estate, Housing & Urban Development, ” The new progressive rules will bring parity among banks, NBFCs and HFCs. These rules will strengthen the capital base of HFCs. The strengthened HFCs will be able to lend more to home buyers. And with loan rates already at historic low, home buying will gain traction. Especially affordable housing buying which offers 3% interest subsidy under PMAY.

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