Home loan subsidy effective from April

Mumbai: The liberalised scheme for one per cent interest subsidy by government on home loans up to Rs 15 lakh will be available for the borrowers whose requests were sanctioned and disbursed from April this year.

The new housing scheme under which the loan limit for interest subvention was raised to Rs 15 lakh, subject to the total housing cost of Rs 25 lakh, will remain valid up to March 2012, the Reserve Bank said today.

"Loans sanctioned and disbursed between October 1, 2009, and March 31, 2011, are outside the ambit of the new liberalised scheme...," the RBI said in a communication to all scheduled commercial banks.

The interest subvention scheme had started from October 2009 and was originally available on loans up to Rs 10 lakh, subject to a total housing cost of Rs 20 lakh.

However, as proposed in the union Budget for the current fiscal, the Cabinet had raised the limit on October 25 to Rs 15 lakh and Rs 25 lakh, respectively.

With the increase in housing loan ceiling, the limit of subsidy for an individual borrower would go up to Rs 14,865 per year for a loan of Rs 15 lakh from the earlier limit of Rs 9,910 for a loan of Rs 10 lakh.

A budgetary provision of Rs 500 crore has been made for the fiscal 2011-12 for implementing the scheme.

The government has designated the National Housing Bank as the nodal agency for implementing the scheme both for scheduled commercial banks and housing finance companies.

Source: Financial Express