NRIs staying outside India for years and expected to stay further for an indefinite time are eligible for housing loans under the stipulations laid out in FEMA, 1999.
Affordable housing loan is available to NRIs to either build
or buy a house. Home loans for NRIs however
do not differ much from loans given to resident Indians except
that more caution is exercised in the case of the former. An
NRI seeking home loans in India is eligible
for only 85% finance whereas a resident gets up to 90% finance.
The tenure is also shorter than that for a resident Indian.
Under the general permission granted by the RBI to NRIs, almost
every nationalized bank like ICICI, Citibank, PNB, HDFC and
the like follow the guidelines set by RBI to sanction loans
to NRIs. Banks and housing finance companies offer
many options to choose from which includes home loans, home
improvement loans, home extension loans, loans to professionals
for office or clinic, home equity loans (loan against property),
loan against rent receivables, short term bridging loans and
the like.
Based on the fulfillment of below terms and conditions, an
NRI can avail housing loans in India.
Terms and Conditions:
- The applicant should be a Graduate.
- The monthly income should not be less than $2000. NRI property loans can be availed against:
- The security of funds held in NRE/FCNR accounts.
- The security of immovable property other than agricultural, plantation or farm property.
- The loan can be availed up to 1, 00, 00,000 INR or 85% of the property cost, including cost of the land, whichever is lower.
- The principal shall not be credited to the applicant's NRE/NRO/FCNR accounts.
- The tenure of the loan for NRI is less than that for a resident Indian. The tenure of the loan is decided by the housing finance company which does not exceed 15 years.
- The loan shall be fully secured by mortgaging either the proposed property or the borrower's other assets in India.
- NRI home loan rates shall be more than for a resident Indian, in compliance with Reserve Bank of India and National Housing Bank directives.
- Repayment of the loan can be by way of remittance from abroad through normal banking channels given out as Equated Monthly Installments (EMIs) and shall be in the form of post-dated cheques, or by debit to his NRE/NRO/FCNR accounts or from the rent received on his Indian property or out of sale proceeds of the immovable property against which such loan was granted.
- There are many repayment options, to help choose the most suitable and effective to follow. Repayment ahead of schedule is permitted.
- All documents as applicable to a resident Indian are mandatory along with few other documents like copy of the passport and a copy of the works contract. The Power Of Attorney (PAO) is a must.
Documents required while applying for a Home Loan:
- Employment/Residency related documents- photocopies of the
following are also required:
Photo copies of:
- Employment contract (in English)
- Latest salary slip.
- Latest work permit.
- Identity card.
- Visa stamped on the passport.
- Continuous Discharge Certificate (CDC) - (if applicable).
- Overseas Bank Account Statement for the last four months.
- Property Related Documents:
- Receipts for payments made for purchase of the residing
unit.
- Copy of approved drawings/ building plans of proposed
construction/purchase/extension.
- Agreement for sale/sale deed/detailed cost estimate from
Architect/Engineer for property to be purchased/constructed/extended.
- Allotment letter from the co-operative society/association
of apartment owners (if applicable).
- Power of Attorney
- Copy of Passport
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