7th Pay Commission: Everyone wants to own a home, but it’s not always a walk in the park. Luckily, central government employees can get some help with home construction. This support comes through the central government’s House Building Advance (HBA) scheme. Let’s dive into the details of this scheme.
House Building Advance (HBA) Scheme
With this scheme, central government employees can apply for a house, flat, or plot valued at up to Rs 1.25 crore. When they apply, they can get a maximum advance of Rs 25 lakh. According to the HBA guidelines, an employee can get an advance for a house or flat that costs up to 139 times their basic salary or Rs 1 crore, whichever is lower. The rules state that the highest advance amount is equal to 34 months’ basic salary, but it can’t go over Rs 25 lakh. Additionally, this amount will be based on the total cost of the house or flat and the employee’s repayment capacity, whichever is less.
Who qualifies for this benefit?
It’s important to know that the House Building Advance (HBA) is available to permanent employees of the Central Government. Temporary employees can also take advantage of this scheme, but there are some conditions. One key requirement is that the central government employee must have completed at least five years of service. Employees who have already taken a home loan from a bank or financial institution can also switch their existing loan to an HBA.
Moreover, the employee must not have received any previous government housing or housing-related benefits. If both partners are government employees, only one can apply for an HBA. The current interest rate for HBA is 7.44 percent, and this rate is reviewed every financial year in consultation with the Ministry of Finance.