New Delhi: National Housing Bank (NHB), the regulator of housing finance institutions, has signed an in-principle agreement with the Rajasthan government and the International Finance Corp. (IFC), the World Bank’s private investment arm, to form a lender that will provide home loans to low-income earners in the state.
It’s the first time the NHB has taken up such a project at a state level, said chairman and managing director R.V.Verma.
“The new finance company will have a corpus of Rs100 crore to begin with. Multiple stakeholders, including IFC, will contribute to the corpus. IFC will contribute around 20% of the entire corpus. If the Rajasthan project turns to be a success, we will send proposals to other state governments also for similar tie-ups at their level,” Verma said.
The Rajasthan government announced a state housing policy in October 2009, offering incentives to developers and institutions to forge public-private partnerships to ensure increased supply of affordable housing units.
Till date, 15 developers have got approvals to build affordable housing projects across seven cities for low-income groups and economically weaker sections, said G.S. Sandhu, principal secretary in Rajasthan’s ministry of urban development and housing andl local self government.
“In all there will be 13,000 dwelling units for those who earn a monthly income of Rs8,000-25,000,” Sandhu said. “The state government will then allocate houses based on their profile and income. As incentives, we will waive off the conversion and external development charges and the approval fee for the developer.”
Separately, Verma said the NHB’s property index, Residex, indicated an increase in property prices in 11 out of 15 cities during April-June.
Four cities, including the national capital and Jaipur, have seen a price correction during the period. In other cities, including Mumbai and Chennai, property prices have risen by as much as 25%.