Amid this festival season, the Modi-led government has announced a big relief for central government employees who are planning to buy a new house. The Ministry of Housing and Urban Affairs has slashed the interest rate on House Building Advance (HBA) for all central government employees from October 1, 2019.
This step was taken by the government to boost the housing demand among the central employees who are planning to buy a new house.
As per the statement issued by the Ministry of Housing and Urban Affairs, “The interest rate on House Building Advance (HBA) for Central Government Employees will be 7.9% from October 1, 2019, for a period of one year.”
Till September 2019, government employees had to pay an interest rate of 8.5% per annum on any house building advance they take.
However, all other provisions for HBA mentioned in the previous Office Memorandum (OM) will remain the same for central government employees.
Here’s how to get benefits of HBA:
Central government employees have to first repay the principal in the first 15 years in not more than 180 monthly installments and interest thereafter in the next five years in not more than 60 monthly installments.
According to the official rules, “The employee should ensure that the house is purchased and mortgaged to the Government within three months of drawl of the advances.”
Housing Building Advance can be availed only by central government employees for construction of their new house, purchasing a plot and also constructing a house on the purchased land. HBA will help in expanding the living accommodation of an existing house.