Interest bearing advances/Sixth Central Pay Commission recommendation on House Building Advance-enhancement in past cases-regarding

No.I-17011/2(1)/2009-H.III
Government of India
Ministry of Urban Development
(Housing -III section)
*****

Nirman Bhawan, New Delhi.
Dated:- the 14th July, 2010

OFFICE MEMORANDUM

Subject:     Interest bearing advances/Sixth Central Pay Commission recommendation on House Building Advance-enhancement in past cases-regarding.

       The undersigned is directed to invite attention to this Ministry's O.M. No.I-17011/2(1)/2009-H.III dated 27th November, 2008 on the above subject and to say that it has been decided in consultations with Ministry of Finance to make the afore-said orders applicable with effect from 1st January, 2006. Accordingly, an enhancement of House Building Advance, if applied for, may be granted for an amount equivalent to the difference between the previously sanctioned amount and the new amount determined on the basis of pay in the pay band, in past cases, where HBA was sanctioned on or after 1-1-2006 but before 27-11-2008 subject to complying following conditions:-

(a)       The Government servant should not have drawn the entire amount of HBA sanctioned under earlier orders and /or where construction is not completed/full cost towards acquisition of house/flat is yet to be paid.

(b)       There will be no deviation from the approved plan of construction on the basis of which the original sanction of House Building Advacne was accorded. The revised cost of the original plan can, however, be considered for determining the additional amount, subject to the prescribed maximum limits.

(c)       Supplementary Mortgage Deed, Personal Bond and Sureties will be drawn and executed at the expense of the loanee.

(d)       The actual entitlement will be restricted to the repaying capacity computed on the basis of the formula laid down in this Ministry's O.M. No.I-17015/16/92-H.III. dated 17.10.2000. It should be ensured that the entire amount of advance with interest is recovered before retirement of the Government servant.

(e)      Rate of Interest: The rate of interest chargeable in such cases would be as per the slab applicable to the total sanctioned amount i.e. amount already sanctioned on or after 1-1-2006 but before 27.11.2008 plus the enhanced sanction. However, the new rate of interest would be chargeable only on collective amount that would remain outstanding on grant of enhancement so granted. Thus, the amount of HBA that has already been re-paid on old rates will not attract the fresh interest charges.

2.      However, the existing limit of maximum admissible amount of Rs.7.50 lakh for the purpose of construction/purchase of new house/flat and Rs.1.80 lakh would remain unchanged. In other words, the sum total of previously sanctioned HBA and the enhancement granted under these orders cannot exceed the aforesaid limits. In any case, not more than one enhancement is admissible to a Govt. employee.

3.       The applications for enhanced HBA should be submitted within six months from the date of issue of this order.

4.      Ministries/Departments whose branch offices are situated in the far flung areas like in case of Ministry of Defence, etc., are advised to give wider publicity to these orders through modern communication mean like facimile e-mail, web-sites etc. so that there is no occassion for any representation for extending the time limits of six months on the grounds of receiving these orders late.

s/d
(V.K. Gupta)
Deputy Financial Adviser

House Building Advance to Central Government Employees

An important order has been published from Ministry of Urban Development regarding House Building Advance to Central Government Employees.

1.House Building Advance is admissible to all those temporary employees also, who have rendered 10 years of continuous service.

2.With effect from 27-11-2008.

3.The maximum limit for grant of HBA shall be 34 months' of pay in the pay band.

4.Subject to a maximum of Rs. 7.50 lakh or cost of the house or the repaying capacity whichever is the least, for new construction/purchase of new house/flat.

5.The maximum limit for grant of HBA for enlargement of existing house shall be 34 months' pay in the pay band.

6.Subject to a maximum of Rs. 1.80 lakh or cost of the enlargement or repaying capacity, whichever is the least.

7.The cost ceiling limit shall be 134 times the pay in the pay band.

8.Subject to a minimum of Rs.7.50 lakh and a maximum of Rs.30 lakh relaxable up to a maximum of 25% of the revised maximum cost ceiling of Rs.30 lakh.

9.The rate of interest on House Building Advance is between 5% to 9.5% ,depending on the loan amount.

10.The repaying capacity of Govt. servants who have more than 20 years of remaining service has been revised from 35% to 40% of pay.

CONDITIONS:

The applicant or spouse or minor child should not already own a house in the town/Urban agglomeration where the house is proposed to be constructed or acquired.

b) The title to the land should be clear. The land may be owned either:
- by the Government employee; or
- jointly by the Government employee and spouse.

COST CEILING:

134 times of pay in the pay band subject to a minimum of Rs. 7.50 lakh and a maximum of Rs.30 lakh (Cost of the house, excluding cost of land should not exceed 134 times of the Basic Pay excluding Grade Pay)

Administrative Ministry may relax the cost ceiling to 25% of cost ceiling mentioned above in the individual cases on merits.

Effective from 27th November, 2008.

Eligibility, Purposes and Conditions as follows...

If both husband and wife are Government Employees, Advacne is admissible to only one of them.

Acquiring a plot and constructing a house thereon.

Enlarging living accomodation in an existing house owned by the employee or jointly with spouse. The total cost of the existing structure (excluding cost of land) and the proposed additions should not exceed the prescribed cost ceiling.

Purchase of house / flat under "Self - Financing Housing Scheme and " Co-operative Group Housing Societies".

For purchase of houses / flat from private parities, i.e., registered builders, architects, house building societies, etc., but not from private individuals.

If GPF withdrawl is also taken for house building, the total amount of GPF withdrawl and the House Building Advance should not exceed the cost-ceiling limit.

House / Flat constructed / acquired with the help of HBA to be used for residential purpose only.

The advance will be limited to the estimated cost of consturction.

Only one advance is admissiable during the entire service.

The amount of advance shall be restricted to the repaying capacity of the employee.

The amount of advance sanctioned can be reduced at the request of the employee to avail of the reduced rate of interest, if the entire advance has not been drawn.

For purchase / Construction of flat or Purchase of a house the amount of advance sanctioned in one lumpsum.

The construction should be exactly according to the approved plan and specification.

The consturction should be completed whithin 18 months of the dateon which the first instalment is drawn.

On completion of construction/purchase, the house should be insured by the employee at his cost against fire, flood and lightning for the full value of the house.

No interest is chargeable beyond the date of reirement/ death of the government employee.

The rate of interest will be reduced half per cent for an employee who undergoes sterilization(family planing).

The entire amount of advacne together with interest is repayable in 20 years. 180 monthly instalments for principal and 60 instalments for interest.

Recovery will commence from the pay for the month following that in which advance is taken.

House Building Advance-enhancement in past cases-regarding

No.I-17011/11(4)/2008-H.III
Government of India
Ministry of Urban Development
(Housing -III section)
*****

Nirman Bhawan, New Delhi.
Dated:- the 27th Nov, 2008

OFFICE MEMORANDUM

Subject:     Interest bearing advances/Sixth Central Pay Commission recommendation on House Building Advance-enhancement in past cases-regarding.

       The undersigned is directed to say that the implementation of the recommendations of the Sixth Central Pay Commission relating to interest bearing advances, including House Building Advance, granted to Central Government employees is under consideration of the Government.

2.      Pending finalisation of the new arrangements, the matter has been examined in consultation with the Department of Expenditure and the following provisions for House Building Advance shall be in operation:

(i)       The maximum limit for grant of HBA shall be 34 months' of pay in the pay band subject to a maximum of Rs.7.50 lakh or cost of the house or the repaying capacity whichever is the least, for new construction/purchase of new house/flat.

(ii)       The maximum limit for grant of HBA for enlargement of existing house shall be 34 months' of pay in the pay band subject to a maximum of Rs. 1.80 lakh or cost of the enlargement or repaying capacity, whichever is the least.
(iii)       The cost ceiling limit shall be 134 times the pay in the pay band subject to a minimum of Rs.7.50 lakh and a maximum of Rs.30.00 lakh relaxable up to a maximum of 25% of the revised maximum cost ceiling of Rs.30.00 lakh.

4.       All Ministries/Departments of Government of India are requested to bring the contents of this O.M. to the notice of all concerned.

5.       These orders shall be effective from the date of their issue.

s/d
(V.K. Gupta)
Deputy Financial Adviser

HOUSE BUILDING ADVANCE AND VEHICLE ADVANCE

HOUSE BUILDING ADVANCE - COMPUTER ADVANCE AND VEHICLE ADVANCE

Most of the VI Pay Commission orders are released with official notification (Gazette) followed by departmental confirmation and notification. But so far we have not come across notification with regard to advances for the purchase of Vehicles, Housing Loan etc.

Sixth pay commission says that all the loans/advances will be carried out by Banks with 2% subsidy on the eligible amount. Is it possible to know when the official orders will be released and reach the departments.

Hope many of the central governmental employees are eagerly waiting for the gazette notification and official communication.