The National Housing Bank (NHB), established under the National Housing Bank Act of 1987, is a pivotal institution in India’s housing finance sector. It aims to promote a sound, healthy, and cost-effective housing finance system and to encourage the development of housing finance institutions. Through various schemes and programmes, the NHB supports the government’s mission to provide affordable housing for all.
Key Objectives of the National Housing Bank
The NHB has several key objectives:
- To promote housing finance institutions both at the local and regional levels.
- To provide financial and other support to such institutions.
- To encourage augmentation of supply of buildable land and also building materials for housing and to upgrade the housing stock in the country.
- To encourage public agencies to emerge as facilitators and suppliers of serviced land for housing.
Major Schemes and Programmes of the NHB
The NHB has introduced several schemes and programmes to promote affordable housing and improve the housing finance sector in India. Some of the major schemes are:
1. Pradhan Mantri Awas Yojana (PMAY) – Credit Linked Subsidy Scheme (CLSS)
The Credit Linked Subsidy Scheme (CLSS) under the Pradhan Mantri Awas Yojana (PMAY) is a flagship initiative aimed at providing affordable housing to the economically weaker sections (EWS), low-income groups (LIG), and middle-income groups (MIG) in India.
- Objective: To provide interest subsidy on home loans for the acquisition, construction, and enhancement of houses to eligible beneficiaries.
- Subsidy Details:
- EWS/LIG: Interest subsidy of 6.5% for loans up to Rs. 6 lakh.
- MIG-I: Interest subsidy of 4% for loans up to Rs. 9 lakh.
- MIG-II: Interest subsidy of 3% for loans up to Rs. 12 lakh.
- Eligibility: Beneficiaries must not own a pucca house and must meet the income criteria specified for EWS, LIG, and MIG categories.
2. Refinance Scheme for Housing Finance Companies (HFCs)
This scheme aims to provide refinance to Housing Finance Companies (HFCs) for their lending to individuals for housing purposes. It enhances the liquidity of HFCs, enabling them to extend more credit to homebuyers.
- Objective: To support HFCs in providing housing finance to individuals, especially those from the lower and middle-income groups.
- Eligibility: HFCs registered with NHB that comply with NHB’s guidelines and regulations.
- Benefits: Enhances the ability of HFCs to offer home loans at competitive interest rates.
3. Refinance Scheme for Scheduled Commercial Banks (SCBs), Regional Rural Banks (RRBs), and Cooperative Banks
This scheme provides refinance support to Scheduled Commercial Banks, Regional Rural Banks, and Cooperative Banks to boost their housing loan portfolios.
- Objective: To encourage these banks to increase their housing finance activities, especially in rural and semi-urban areas.
- Eligibility: SCBs, RRBs, and Cooperative Banks meeting the eligibility criteria set by NHB.
- Benefits: Increases the flow of credit to the housing sector, promoting homeownership among the lower-income groups.
4. Rural Housing Fund (RHF)
The Rural Housing Fund (RHF) is designed to channelize funds to institutions providing housing finance in rural areas, with a focus on economically weaker sections and low-income groups.
- Objective: To improve housing conditions in rural areas by providing affordable finance.
- Eligibility: Scheduled Banks, Regional Rural Banks, and other eligible institutions.
- Benefits: Enhances access to housing finance in rural areas, promoting rural development and reducing urban migration.
5. Urban Housing Fund (UHF)
The Urban Housing Fund (UHF) aims to support urban housing projects for economically weaker sections and low-income groups in urban areas.
- Objective: To facilitate the availability of affordable housing in urban areas.
- Eligibility: Housing Finance Companies, Scheduled Banks, and other eligible institutions.
- Benefits: Promotes the construction of affordable housing in urban areas, addressing the housing shortage and improving living conditions.
6. Special Urban Housing Refinance Scheme for Low Income Households
This scheme provides refinance to HFCs and other eligible institutions for lending to low-income households in urban areas.
- Objective: To support the urban poor in accessing affordable housing finance.
- Eligibility: HFCs and other institutions meeting NHB’s criteria.
- Benefits: Increases the availability of affordable housing finance for low-income households, promoting urban development.
7. Energy Efficient Housing Scheme
The Energy Efficient Housing Scheme aims to promote the construction and purchase of energy-efficient residential units.
- Objective: To encourage the adoption of energy-efficient technologies in housing construction.
- Eligibility: Housing Finance Institutions and other eligible institutions.
- Benefits: Reduces energy consumption and promotes sustainable housing practices.
Conclusion
The National Housing Bank, through its various schemes and programmes, plays a crucial role in promoting affordable housing in India. By providing financial assistance and support to housing finance institutions, the NHB helps ensure that all sections of society have access to quality housing. These initiatives contribute significantly to the government’s mission of ‘Housing for All’ and support the overall development of the housing sector in the country.
