CHAPTER 1

INTRODUCTION

1.1 Overview

Housing is one of the fundamental demands for living. Access to

acceptable housing is one of the elementary human needs as well as one of the keys to

peace and happiness. In every country, resolving housing issues has political, social and

economic significance. To solve housing issues, every country has formulated its own

specific housing development program and developed its unique program operating

mechanisms.

Many countries have especially drawn up the development program of public housing

to assist low and middle-income groups solve their particular housing-related issues.

During the last one decade, Asia Pacific economies have made significant progress in

developing private housing market and market based systems for financing home

purchases. Government sponsored housing finance strategies have become more and

more non-viable due to budget constraints. Post 1997, Asian financial crisis, the

respective Governments in Asia stepped up their effort to improve the structure of the

housing finance system. Many countries even in other parts of the globe have

experienced the waves of financial liberalization and deregulation.

House prices have increased in most industrialised and emerging economics and in

many countries housing debt per capita and house prices have reached new all-time highs

(BIS, 2006).The key factors triggering the progressive growth on the demand side are

declining interest rates over a period of years, rapid increasing in income levels, tax

benefits extended to borrowers whereas from the supply side the emerging competition in

the housing finance sector between lenders, an increasing number of new entrants to the

housing finance market.

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1.2 Global Trends in Housing and Housing Finance Markets

Housing is an integral measure of a country’s development, and the way a society

housesits people is an important determinant of its development and progress (Parekh, D,

2006).Housing has traditionally been one of the most important assets for households in

Asia(Haibin Zhu, 2006). Now, let us have a look at the evolution and trends in housing

and housing finance markets in selected countries

Loans for Housing

Realising the necessity to provide houses and improve housing facilities in the

country, the nationalised banks have been asked to provide funds for housing since 1979.

Initially, they were expected to lend Rs.150 crores annually, but the target was raised to

Rs.300 crores for the year 1989-90. For the year 1990-91, individual nationalised banks

housing finance allocation was required to be computed at 1.5% of the incremental

deposits on March 1990, over the corresponding figure of March 1989.According to the

guidelines issued by the Reserve Bank, a bank’s assistance to the housing sector

(including rural areas) may be as follows:

1. 30% of the total housing finance allocation by way of direct assistance to

individuals or a group of borrowers etc., out of which at least half should be given as

direct housing loans in rural and semi-urban areas.

2. 30%of the allocation for landing to HUDCO, Housing Development Boards,

HDFC and other housing agencies for construction of house. The remaining 40% of the

assistance may be by way of subscription to the guaranteed bonds/ debentures of

HUDCO, and National Housing Bank.

3. The loan can be used for purchase of a house or flat, construction of a house or

tenement or for additions or extensions to an existing structure.

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1.3 Objectives

To provide long term finance for construction of houses for residential purposes or

finance or undertake housing and urban development programmes in the country.

To finance or undertake, wholly or partly, the setting up of new or satellite

town.

To subscribe to the debentures and bonds to be issued by the State Housing

(and or Urban Development) Boards, Improvement Trusts, Development

Authorities etc., specifically for the purpose of financing housing and urban

development programs. 

To finance or undertake the setting up of industrial enterprises of building

material.

To administer the moneys received, from time to time, from the Government

of India and other sources as grants or otherwise for the purposes of financing or

undertaking housing and urban development programmes in the country.

To promote, establish, assist, collaborate and provide consultancy services

for the projects of designing and planning of works relating to Housing and Urban

Development programs in India and abroad.

1.4 Need for Housing Loan

Housing is one of the basic needs of mankind in terms of safety, security, self-

esteem, social status, cultural identity, satisfaction and achievement. It is fundamental

requirement both for human existence and settlement. Housing contributes effectively in

fixed capital formation as well as creation of productive employment. It plays an

important role in country’s economy, typically accounting for around 10 to 20 per cent of

total economic activity. It has been estimated that there are around 600 other industries

that have links to the housing markets. A stimulus to the demand for housing will have a

direct or indirect stimulatory impact on all of these industries.

3

For every rupee invested in India, INR 0.78 is added to the gross domestic product.

Since independence, growth in the Indian population has aggravated the problem of

housing for Indian citizens. According to the population census of 2001, out of the total

population 1027 million about 742 million live in rural areas and 285 million live in

urban areas. Urban population is accounted as 27.8% to the total population whereas it

was 25.7% under 1991 census. So there is rise of 2.1% in the urbanization of Indian

population. This has also brought along with it disproportionately higher demand for

housing be it for upper class, middle class and for low income category of population.

Despite the growth of housing markets in India, for example, the current housing

shortage was estimated to be over 22 million dwelling units between 2002 and 2007. The

provision of finance for the purchase of residential housing is, or should be, an important

part of any society’s financial structure. Compared to a household’s average income, the

purchase of a housing unit is a large investment – in many cases it is in fact a household’s

biggest lifetime investment.

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CHAPTER 2

HOUSING LOAN: A CHANGED SCENARIO

2.1 Housing Loan: A Changed Scenario

Traditionally in India, most people used to depend on their savings while considering

buying a home. Provident fund and gratuity amounts received after retirement were the

major sources of finance for employed or retired people looking for owning houses.

However, with the emergence of housing finance as a major business in the country, an

increasingly large number of people are going in for home loans. Earlier it was

considered socially unviable to borrow funds. There’s been an evident shift in perception

and mind set in the Indian middle class over the last 5 to 10 years, thanks to the impact of

liberalization and opening up of the Indian economy, a rise in the average income across

households, and a palpable desire to own things now.

The present generation is more ambitious than the previous ones cannot be disrupted.

Perhaps, it is that ambition which drives young people to buy a house, here is sea change

in the Indian families. Indians are shifting from joint family concept to nuclear family

concept. Incomes of families are rising and their purchasing capacities as well as loan

repaying capacities are going up. Earlier a large number of borrowers used to be in their

late 30’s or early 40’s but today greater numbers of borrowers are in their mid 30’s. This

change eventually brings more demand for housing finance. These projections suggest

that demographic growth in India’s large cities will be high, partly due to population

growth and partly due to immigration. These are some of the indications that signal

bright future of housing finance industry which is currently facing tough times due to the

ongoing economic recession.

The major focus of government policies until 1970 was on agriculture and industry

and housing was not the priority sector. In the 1970’s, a network of housing boards at

state level was incorporated with the Housing Urban Development Corporation 5

(HUDCO) acting as an apex body, providing finance and technical support to these

boards. After the initiation of the liberalization process in India, the government has

taken number of measures to promote housing from the formal sector and share the task

of providing housing finance with the private sector.

Incorporation of National Housing Bank (NHB) in the year 1987 as the controlling body

to formalize housing finance was one of the remarkable steps in this direction. Housing

finance has emerged as a growth sector these days expected to grow at a phenomenal

39% PA. As per the estimates of NHB housing finance market was 45000 crores during

the year 2003-04 and had reached at more than 80,000 crores till the end of 2006. Banks

and financial institutions have brought sea changes in their strategies and there is clear

shift from seller’s market to buyer’s market. Liberal tax incentives by the government

coupled with low and competitive interest rates has made this sector a high growth

sector.

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2.2 Documentation Required

Applying for a Housing Loan: While submitting the application form for a home loan, lenders ask for documents to

establish the applicant’s income.

This is backed up by a proof like copies of last three year’s INCOME TAX returns

(along with the copies of computation of income/annual accounts, if any), Form 16 or

Form 16A, last three month's salary slips of the applicant, copies of the last 6 month's

statements of all active bank accounts in which applicant’s salary or business income

details are reflected, etc.

 

For self-employed people, if the income has increased dramatically in the past year, it is

advisable that the applicant should have his/her explanation ready as to why they think

this is a permanent increase in their income, rather than just a one-time aberration which

may decrease in near future. The reason for this is that if the lender is convinced with the

applicant’s explanation, then the loan eligibility can be considered in relation to the latest

income rather than considering the much lower average income.

For salaried employees, if the income has increased since the last financial year as

shown in their latest salary slips, such increased salary is taken into account for loan

eligibility purposes.

2.3 Applicant’s Bank Statements

Level of activity: In case of self-employed people, this gives a good idea about the

extent of his or her business activities.

Average bank balance: A look at the average bank balances maintained in a savings

bank account speaks a lot about the spending or saving habits of an individual.7

Cheque returns: A small charge debited by the applicant’s bank in the statement

indicates that a cheque issued by him or her was returned by the bank. Too many of such

returns can have a negative impact on a loan sanction

Cheque bounces: If cheques deposited by the applicants are returned by the issuer's

bank, they will be visible in the bank statement. All Banks have specific norms as to how

many such returns are acceptable in a period of 1 year.

Periodic payments: The existence of periodic payments to other finance companies

or bank etc indicates an existing liability and the applicant will need’s to provide full

details of these liabilities to the lender.

Age proof: Applicant’s age proof have to be submitted such as school leaving

certificate/driving license/passport/ration card/PAN card/election commission's card/etc.

Address proof:  Similar documents.

Identification proof: Same as above, but with photographs. Sometimes, the same

document, if it contains a photograph, the current residential address and the correct age

can be proof for all 3 things.

Applicant’s employment details: If the applicant’s employer is not well-known,

then a short summary about the nature of the company, its business lines, its main

customers, its competitors, number of offices, number of employees, turnover, profit, etc

is needed. Usually, the company profile that is available on the standard website of the

company is enough.

Applicant’s investments: This helps the bank to estimate the applicant’s ability to

pay the down payment as well as his or her saving habits. 

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2.4 Information Resource for Housing Loans in India

For many millions of Indians, the single greatest achievement in life was to

own a home, and thanks to a range of banking services now available, home loans are a

simple affair now. In fact, home loans are now sold as a product and the applicant is

treated like a customer. Gone are the days when ordinary folk depended on a lifetime of

savings and resorted to the local moneylender to build or buy a house. Home loans make

it possible to move into your own home, almost as soon as you can afford the down-

payment and keep paying for it while you also live in it. But the home loan is actually a

mortgage and you could lose the home in case you are not able to pay it. Most banks

have standard guidelines for applying for a home loan and a set of rules, which may vary,

from one finance institution from the other.

The term of the loan may range from one year to thirty years, with varying interest

rates. The longer the term, the higher the interest charged, usually. However, having

decided on a longer term, a pre-payment of the loan also leads to pre-payment penalty-

which usually ranges from one to two per cent.

For instance, most home loan applicants have to be between twenty-one and fifty-

eight years of age, or at least the guarantor has to be. There may be age limit extensions

of government employees or self-employed people who will not be forced to retire at

sixty.

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CHAPTER 3

NATIONAL HOUSING BANK

3.1 Role of National Housing Bank

The National Housing Bank (NHB) was set up in July 1988, under an Act of the

Parliament. NHB was conceived and promoted to function as the apex institution in the

housing sector and is wholly owned by the Reserve Bank of India. NHB’s principal

mandate has been to establish a network of housing finance outlets across the vast

expanse of the nation to serve different income and social groups in different regions.

The purpose of setting up more local and regional level specialized institutions is to have

dedicated outlets for supply of housing credit. The need to set up this institution as the

apex body stemmed from various factors. Most prominent amongst them was the acute

shortage of funds confronting the housing sector and the resulting serious gap in housing

supply. Absence of specialized and mature housing finance system resulted in inadequate

finance for both individual loans and delivery of buildable/serviced land, building

materials, cost-effective technologies and other related know-how. With the setting up of

NHB in 1988, there has been a sustained effort at creating and supporting new set of

specialized institutions to serve as dedicated centers for housing credit.

3.2 Objectives of National Housing Banks

To promote a sound, healthy, viable and efficient housing finance system to cater

to all segments of the population.

To establish a network of housing finance outlets to adequately serve different

regions and different income groups.

To promote savings for housing.

To promote appropriate technologies for housing.10

To strengthen the backward and forward linkages of the housing sector with rest of

the economy.

To augment the financial resources for the sector.

3.3 Functions of National Housing Banks

The activities of NHB can be broadly divided into following three categories:

Promotion & Development

Intervention through institutional credit can be made more effective by adoption of

different approaches to cater to the needs of different income groups. With the setting up

of NHB in 1988, there have been sustained efforts at creating and supporting new set of

specialized institutions to serve as dedicated centers for housing credit. NHB’s role in

this regard can be measured from the growth of specialized institutions spread over the

vast span of the country.

Regulatory Function The second important function of NHB is the regulatory role assigned to it. The

objective is to create the framework for an effective system of ‘responsive regulation’ in

tandem with the free market approach which would promote the credibility of the

housing finance system among the savers and investors.

Financial Function

The third important role of NHB is to provide financial assistance to the various

banks and housing finance institutions. As an apex refinance institution, the principal

focus of NHB’s program is to generate large scale involvement of primary lending

institutions falling in various categories to serve as dedicated outlets for assistance to the 11

housing sector. These institutions include scheduled banks (both commercial and

cooperative), regional rural banks, specialized housing finance institutions, Agriculture

and Rural Development Banks and the Apex cooperative housing finance societies. The

National Housing Bank (NHB) has formulated a special Rural Housing Finance Scheme

to mark the Golden Jubilee of Indian Independence.

3.4 Institutions Providing Housing Finance

In India, the following types of institutions provide long-term finance for housing:

Commercial banks;

Cooperative banks;

Housing finance companies;

Regional rural banks;

Agriculture and rural development banks; and

Cooperative housing finance societies

The commercial banks are the largest mobilizer of savings in the country. In terms of

coverage also, the banking system has the largest branch network. However, in the past,

the savings mobilized were not being ploughed back to the households for shelter

purposes. The reluctance on the part of the banks to extend credit for housing as a regular

part of their business was basically due to their perceived role being limited to financing

of working capital needs of commerce, industry and trade. Yet another factor was that the

banks did not want to tie up their short resources in extending long-term housing loans.

.

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Issues in the Development of the Housing Finance Sector

The major issue in the development of the housing sector is the availability of long-

term resources. One such source is mortgage securitization, which is still at a nascent

stage in India. Although NHB in association with some HFCs like, Can Fin Home has

effected securitization of mortgage loans in various trenches, a lot of ground is left to be

covered. The constraints arise from some legal issues, taxation matters and the regulatory

environment.

As mortgage debt is regarded as related to immovable property, its transfer can only

be affected by means of an instrument in writing, which requires payment of stamp duty

for the instrument to be valid. The stamp duty on conveyance ranges from 3% to 15% of

the consideration for transfer in different states.

Further, only a registered instrument can transfer such mortgage debt. As

securitization envisages pooling of mortgages originated by housing finance institutions

in different states, the requirement of registration not only makes the transaction too

costly to be financially viable but also makes it impractical.

Some of the state governments have realized the importance of mortgage backed

securitization and have reduced the stamp duty payable on the instrument of

securitization to 0.1%. A few others are expected to follow.

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CHAPTER 4

LOANS OFFERED BY PROMINENT HFCS

4.1 Overview of Housing Loans Offered by Prominent HFCs

Most of the institutions today offer quite a variety of housing loans to prospective

borrowers.

Loans can be availed for the following purposes:

Purchase house/ flat.

Construction of house/ flat.

Extend, repair, renovate or alter a house/ flat.

Purchase a plot of land meant for construction of a dwelling unit

Interest rate options:

The borrower has an option of availing the loan either at a fixed rate of interest, which

stays constant throughout the loan period, or at a floating rate of interest where the interest

changes (increases or decreases) depending on changes in the Bank's Term Lending Rate.

LTV is the percentage of the value of property that the lender will provide. The remaining

value of the property will be the owner’s contribution (also called the margin). The usual

LTV values are as shown but differ from one HFC to another.

85% for new house/ flat

85% for old house/ flat

85% for purchase of a plot of land alone

20% for repairs and renovation

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Loan amounts

Most lenders are offering loans in the range of 10 million rupees but some go higher.

Detailed description of each loan appears in the schedules comparing loans offered by major

HFCs.

Tenure of loans

Loan terms vary from 5, 10, 15 years generally. Some HFCs are offering adjustable rate

loans up to 20 or even 30 years.

Repayment:

The borrowers repay the loan in Equated Monthly Installments (EMIs) comprising

principal and interest. Repayment by way of EMI commences from the month following

the month in which you take full disbursement.

Eligibility and repayment capacity

You can avail a loan if you are 21 years or older and have a steady source of income.

Repayment capacity takes into consideration factors such as income, age, qualifications,

number of dependants, spouse's income, assets, liabilities, stability and continuity of

occupation and savings history

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4.2 Trends in Housing Finance Sector

Housing finance stands tall in the financial sector today. Over the last four years, the

business has added story upon story on safe foundations. This has attracted new entrants.

The pace of this growth begs questions.

Will the business continue to grow at the same rate over the next few years?

Will the risk related to lending increase?

How will the increased interest of commercial banks and the entry of new

competition impact the housing finance market?

4.3 Mortgage Guarantee

National Housing Bank (NHB) is in the process of setting up a mortgage guarantee

company in association with some foreign housing finance firms with a view to

encourage housing loans for the "non-salary informal class of the society". The company

was expected to be formed by the end of this year and would become operational early

next year.

The non-formal sector, which is a major chunk of the Indian housing loan market, has

not yet been seriously addressed by banks or housing finance companies due to the

gravity of the risks involved compared to the salaried sector.

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Scheme for Guaranteeing Bonds of HFCs

Housing Finance companies depend to a great extent on refinance assistance from

NHB. However, the extension of refinance assistance by NHB is constrained by various

factors like NHB's own NOF, HFCs' borrowing power etc. In addition, in the present

liberalized environment, the HFCs prefer to raise resources directly from market in order

to eliminate the cost of intermediation. Besides NHB refinance, HFCs mainly depend

upon term loans from banks and public deposits. Of late, the maturity profile of public

deposits has been shortening leading to asset liability mismatches for HFCs. One way to

overcome this problem is floatation of bonds/debentures having a longer maturity period

of say five to seven years. To attract the investors at competitively low rates, such

bonds/debentures should have sufficiently high rating. Many of the HFCs have not been

able to float bonds/debentures because of the lower credit rating from the rating agencies

for various reasons including the inherent mismatch between assets and liabilities. NHB's

intervention in this area was considered critical and accordingly a scheme was introduced

to extend guarantee to the bonds/ debentures to be floated by HFCs meeting certain laid

down criteria. Under the scheme, NHB will provide top ended guarantee relating to the

repayment of principal and interest which will provide necessary credit enhancement and

will enable HFCs to acquire higher credit rating leading to competitive pricing of these

instruments. The salient features of the scheme are as under:

17

CASE STUDY

Introducing HUDCO

Housing and construction have been regarded as the engine of the economy on

account of their inherent potential to kick starts the economy. Apart from being a basic

human need, housing functions as the catalyst for the development of concomitant

infrastructure and stimulates the growth of secondary and tertiary sectors. This is on

account of the intrinsic chain of backward and forward linkages with other sectors of the

economy, fuelling growth of ancillary industries such as cement, steel, brick and tiles,

building material, paints and finishes etc. besides triggering off the demand for consumer

goods as well as supporting services. Empirical evidence has established that along with

the significant contribution to the national income and gap, housing is one of the largest

employment generators in India.

Incorporated on 25 April 1970, HUDCO was an expression of the concern of the central

government in regard to the deteriorating housing conditions in the country and a desire

to assist various agencies in dealing with it in a positive manner. The principal mandate

of HUDCO was to ameliorate the housing conditions of all groups with a thrust to the

needs of low-income group (LIG) and economically weaker sections (EWS). HUDCO

today has emerged as the leading national techno-financing institution with a major

objective today of financing/encouraging the housing activity in the country and

alleviating housing shortage of all groups in rural and urban areas and the development of

urban infrastructure of various shades in human settlements.

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Resource Mobilization

HUDCO was established with an equity base of Rs.2 crore. Over the years, the

Government has expanded the equity base. The present authorized capital base of

HUDCO is Rs.2500 crore and paid-up capital is Rs.2001.9 crore (as on March 31,

2009). HUDCO has created a reserve of Rs.2, 665.96 crore as on 31st March 2009. The

net worth of HUDCO is Rs.4, 647.46 crore. Over the years, HUDCO has further been

able to mobilise resource from institutional agencies like LIC, GIC, UTI Banking

Sector, International Assistance (Kfw, JBIC, ODA, ADB, USAID etc.) and market

borrowings through debentures, taxable and tax-free bonds as well as through public

deposits taking the overall borrowing to Rs.19,249.32 crore

Programs

In order to realize the objectives for which it was established HUDCO has implemented a

variety of schemes for shelter and services, thereby improving the living conditions of the

people.

Apart from financing housing schemes HUDCO is also contributing to improve the

quality of life by augmenting basic community facilities and infrastructure services.

Projects involving self-help by the beneficiaries are promoted by encouraging sites and

services schemes, core housing, skeletal housing, shelter up gradation and so forth. In

order to provide basic facilities in the existing houses where adequate sanitary disposal

systems are not available, financial assistance for basic sanitation schemes is being

extended on liberalized terms.

HUDCO extends assistance benefiting the masses on urban and rural areas under a broad

spectrum of programs as listed below.

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Housing

Urban housing

Rural housing

Staff rental housing

Repairs and renewals

Shelter and sanitation facilities for foot path dwellers in urban areas (night shelter,

pay and use toilettes)

Working women ownership condominium housing

Housing through NGO’s/ CBO's;

Housing through private builders/joint sector

Land acquisition

Infrastructure

Integrated land acquisition and development

Basic sanitation

Environmental improvement of slums

Utility infrastructure

Social infrastructure

Economic and commercial Infrastructure

Building Technology

Building centres for technology transfer at the grass roots

Building material industries

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Consultancy Services

Consultancy in housing, urban development and infrastructure

Research and Training

Capacity building and technical assistance to all borrowing agencies

Research and training in human settlements.

HUDCO Niwas

To provide housing finance to resident and non-resident Indians, HUDCO launched its

retail finance window on Mar 1999. Ever since its launch it has received overwhelming

response for it most competitive interest rates coupled with a broad based user friendly

options and value added service as a part of its scheme. Loan is provided for construction

or purchase of house/flat; for purchase of plot from public agencies and for extension or

improvements on existing house.

Interest calculated on monthly reducing balance

Waiver of last two months instalments if all earlier instalment are paid on time

Free personal accident insurance and insurance of borrowers house against fire and

natural calamities.

Low processing and administrative charges further reduction for armed/Para

military/ police forces personnel, widow or physically challenged persons.

No prepayment penalties

Free counselling to alternate building technologies

Free counselling on designing the house.

21

Urban Infrastructure

HUDCO has also been entrusted the responsibility to fiancé urban infrastructure projects.

For this, the ministry of urban development and poverty alleviation, govt. of India up to

the year 2002-2003, provided additional equity support of Rs.188.50 crores.

HUDCO has so far sanctioned loan off Rs. 20526 crores for 1933 urban infrastructure

projects. These cover sectors of water supply, sewerage, and drainage, sold waste

management, road/bridges. Transport nagar/terminal, airports, social infrastructure, area

development projects, commercial complexes, integrated low cost sanitation and basic

sanitation schemes.

The HUDCO Vision -2012

To emerge as the market leader by consolidating and elevating HUDCO image in the

area of housing and urban loan infrastructure finance through market orientation

involving public private and people’s participation and wider coverage of market both by

way of reaching out the new segments and diversifying into related areas to provide new

services; while keeping its social Commitments and promoting appropriated building

technologies by means of a competent motivated, efficient workforce”.

The corporate plan 2010 envisages the formation of independent and synergetic cells or

empowered groups on the area of strategy planning. Business development, asset liability

management, risk management, Consultancy management, organizational systems and

estate development to ensure sustained business growth besides exploring new avenues

of diversification.

22

The stress is on expansion of lending to housing and urban infrastructure, housing deliver

through expanded avenues including retail financing, increased Consultancy assistance

for projects in India and abroad, impetus to building technology trader initiatives and in

house research and training programs with national/international networking.

Introducing HUDCO Niwas

The HUDCO NIWAS scheme emerging as a popular individual home loan-lending

window continued to elicit an overwhelming response. Ever since the launch of the

scheme in March 1999, it has benefited over 3.32 lakh families with a total sanction of

Rs 2692.16 crores and disbursement of Rs.2475.64 crores.

During the year 2009-10 alone, an amount of Rs. 464. 03 crores have been sanctioned

from 75296 applicants, besides accounting for a release of over Rs. 1006.73 crores.

As part of its objective to reach its beneficiaries directly, HUDCO is offering financial

assistance to individual families to enable them to acquire a home of their own through

its “HUDCO NIWAS” scheme.

HUDCO NIWAS offers the following schemes:

Individual housing finance scheme for resident Indians

Individual housing finance scheme for non-resident Indians

Bulk loans to govt. and public sector undertaking for HBA to their employees

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“HUDCO NIWAS” offers loan assistant to/for:

a) Construct a house/buy a house or flat;

b) Extend or improve the existing house or flat

c) Purchase a plot from public agencies/co-op societies of government

employees/reputed developers.

d) Registration of existing house including conversion from leasehold to free hold

e) Refinancing of existing housing loans taken from other institutions

f) Loan to professionals for non residential premises;

g) Loan against residential property

24

CONCLUSION

In the conclusion I would like to say that it was a very informative project. If you are

wanting buying   a   home  or refinancing your mortgage loan, you should be further

attentive not to make large purchases on credit   cards  before your application until closing

the mortgage refinancing or new home   loan . Credit score companies might be slow in

entering new activities into your history. So you may just scrape pass the credit score

search first time round. Nevertheless, as the new spending begins appearing in your

credit report, your rating may go down to a level that is not agreeable any longer. 

This project would rather help you a lot if you are planning to buy a home loan.

It has all the details needed to know when you are going for a home loan. It is very

important for us to decide whether we are taking the loan on fixed or floating intrest.

Information regarding the various types of intrest is given in this project. ‘HOME

SWEET HOME’ it is very important to have a home to live in. thus I conclude be wise

before taking a home loan. This project would make you wiser after you hve read it. And

the interest rates given in the project are of 2010 and are subject to change.

The risk management process involves identification of the risks, deciding the

appropriate exposure level to the risks and developing the strategies to manage the risk.

Asset Liability Management is one such tool for managing the risks. NHB has recently

issued the guidelines for putting in place a system of Asset Liability Management in

HFCs and these guidelines are to be made operational with effect from the current year.

Any risk management system requires data, which are accurate and available on time.

Thus efforts should be made to capture the data from the various branches on time.

25

BIBLOGRAPHY

Website:

1. www.Deals4Lons.com

2. www.bankbazar.com

3. www.wikipedia.com

Books:

1. NHB-report on trend and progress in housing

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