NHB To Open Rs 10,000-Crore Liquidity Window For Housing Finance Companies

The National Housing Bank will open a liquidity infusion facility of Rs 10,000 crore for housing finance companies to ease flow of funds to the stretched real estate sector.

The liquidity will be available from today, helping lend money to individuals buying affordable houses, according to a statement from the Ministry of Finance.

All mortgage lenders registered with the NHB and with a minimum internal rating of ‘B’ can avail funds under the scheme till June 30 next year. The purpose is to create individual housing loan portfolio of companies within the next three months, according to details by NHB.

The lenders can use the facility for financing individual housing loans which fall under priority sector as defined by the Reserve Bank of India—loans up to Rs 35 lakh in metro cities and up to Rs 28 lakh in other areas.

If the amount drawn under the scheme is not used for three months, it will have to be refunded.

The maximum amount drawn by each mortgage lender is capped at Rs 500 crore. A lender will be able to refinance a maximum of 15 percent of net-owned funds as per last audited balance sheet or 50 percent of the individual housing loan portfolio as on March 31, whichever is lower.

This would be over and two existing refinance schemes of the NHB, the release said. The NHB has a regular financing scheme and an affordable housing financing scheme.

Last fiscal, the NHB had increased the refinance limit to Rs 30,000 crore for mortgage lenders from Rs 24,000 crore to alleviate the liquidity crunch stemming from the series of defaults by IL&FS group companies.