House Building Advance Scheme: Everyone aspires to have their own home. For central government employees, realizing this dream of constructing or purchasing a home is somewhat more accessible. Thanks to the Central Government’s House Building Advance (HBA) scheme, employees can obtain home loans at significantly low interest rates. Let’s delve deeper into this scheme.
What is the scheme?
The House Building Advance Scheme allows the government to offer loans to central government employees at very low interest rates for building, buying, renovating, or acquiring a plot of land. This initiative greatly assists employees in securing their future and fulfilling their housing requirements. To enhance its effectiveness, the government has raised the maximum loan limit under this scheme.
Currently, a central government employee can access a maximum amount of up to 34 times their basic pay plus DA, or up to Rs 25 lakh, as HBA. If an employee intends to expand or renovate their residence, the advance is also granted within the specified limit. The government provides a much lower interest rate on HBA compared to market rates. Typically, this interest rate falls between 6% and 7.5%, while private banks charge considerably higher home loan rates. It’s important to note that the HBA interest rate is fixed, which means there is no risk of interest increases throughout the loan duration.
Conditions of House Building Advance Scheme
This scheme is accessible to all permanent employees of the Central Government, although temporary employees may also benefit under specific conditions. However, it is essential for the Central Government employee to have completed a minimum of five years of service. Additionally, the employee must not have previously availed any government housing or housing benefits. If both partners are government employees, only one can apply for HBA.
Scheme rules made easy
In recent years, the government has further streamlined HBA regulations. The submission process for construction proof, maps, and other necessary documents is now conducted online. This has accelerated the loan process and removed unnecessary delays for borrowers.