central government. The interest rate on HBA interest rate for House Building Advance Scheme 2021 has been reduced from the current 8.5% to 6.64%. The Narendra Modi-led central government had earlier revised the House Building Advance Rules for central government employees incorporating the approved recommendations of the 7th Central Pay Commission or 7th CPC. Union Government. Even the loan amount under the HBA scheme and some rules have been modified. In this article, we will tell you about the complete information about house construction advance scheme.
House Building Advance Scheme 2021 for Central Government Employees
The interest rate of House Building Advance Scheme 2021 will be linked to the 10-year G-Sec yield on the amount of advance taken for building a house. At present the interest rate on housing construction advance is 8.50% of the simple interest. As of September 14, 2019, the 10-year G-Sec yield is 6.64 per cent. This means that the interest rate under HBA for central government employees will fall to around 6.64% from the current 8.5%. However, the actual modalities on the effective HbA interest rate remain to be seen.
Amount for Central Government Employee under HBA Scheme
The total amount received by a Central Government employee under the House Building Advance Scheme for 34 months of his basic monthly salary or Rs 25 lakh or the cost of the house or the amount as per the repayment capacity of the employee, whichever is higher. Less for new construction or purchase of new house or flat.
A Central Government employee to claim HBA even for house extension. But, HBA for extension of house is limited to Rs 10 lakh or basic monthly salary of 34 months, or the amount as per the repayment capacity of the employee, whichever is less.
House Building Advance Calculator
The method of recovery of HBA will continue as per the existing pattern for recovery of principal in 180 monthly installments in the first fifteen years and thereafter in 60 monthly installments in the next five years. If both the spouses are central government employees, then both are eligible to claim HBA, either separately or jointly.
Limit on Advance Loan taken under Home Building Advance Scheme
Earlier, the amount limit was Rs. 7.50 lakh with interest from 6 percent to 9.50 percent. Now the advance loan limit under the Home Construction Advance Scheme has been increased. As per the new limit, the Central Govt. Employees will be able to get advance loan up to Rs. 25 lakh at 8.5 percent interest rate.
Accordingly, the employee can take loan up to 25 lakhs for construction and purchase of house at simple interest rate. The scheme is being implemented by the Ministry of Housing and Urban Affairs. The profit from this modified loan can be approx. 3 times as compared to the previous amount given under the House Building Advance Scheme.
However, employees who are planning to repair/expand their homes can take a loan of up to Rs. 10 lakh as compared to the previous limit of Rs. 1.8 lakhs. Interested candidates can apply for the loan by downloading the application form for this scheme.
Central Government Schemes 2021Popular Schemes in the Centre:Pradhan Mantri Awas Yojana 2021PM Awas Yojana Rural (PMAY-G)Prime Minister Awas Yojana
House Building Advance 2021 Eligibility Criteria
The details of eligibility criteria for the scheme are given below
According to the statement of the Ministry of Housing and Urban Affairs, people will now be able to save more by availing the scheme as compared to borrowing from lending institutions on loans of Rs. 25 lakhs for a period of 20 years.
Interest Rate Benefit Under HBA 2021
Benefits of House Building Advance 2021
Below are the details of the revised rules of HBA 2021 as per the recommendations of 7th Pay Commission.
- The employee can take the basic salary 34 months in advance or up to Rs 25 lakh. Earlier this limit was only Rs. 7.50 lakhs.
- The beneficiary can use this money for construction or purchase of a new house.
- The revised amount has been increased to Rs. 10 lakh for the extension of the house (earlier Rs 1.80 lakh).
- The total cost of the house should not exceed 139 times the basic salary of the employee subject to a maximum of Rs. 1 crore. However, it can be increased to a maximum of 25% depending upon the merit of the individual case.
- The interest rate is now fixed at 8.5% nominal simple interest without any slab. Earlier this interest rate was (6% to 9.5%) for loans of Rs 50,000 to 7,50,000.
- Now candidates can obtain ‘No Objection Certificate’ at the time of HBA clearance.
- In addition, the government also makes easy provision for other charges and will ensure easy availability of bank credit.
The interest rate under the House Building Advance 2021 scheme will be revised every three years in consultation with the Finance Ministry.
House Building Advance 2021 Rules
Also, candidates can download the new rules pdf of House Building Advance 2021 from the official website of Ministry of Housing and Urban Affairs by using the link given below.
In English: House Building Advance Rules – https://dopt.gov.in/sites/default/files/Revised_AIS_Rule_Vol_I_Rule_23.pdf
Pre-rules for house construction advance planning – http://mohua.gov.in/pdf/5a05336ac28f7HBA%20Rules%202017.pdf
For more updates and latest information regarding Housing Building 2021 kindly visit the official website moud.gov.in.