HUDCO Home Loan

About HUDCO Home Loan

Very rarely you find a lender that offers a home loan with no processing fee and prepayment charges. And in that list, you have Housing and Urban Development Corporation Limited (HUDCO). The firm, set up under the Companies Act 1956 with a capital infusion of ₹2 Crores in 1970, offers urban & rural housing finance along with slum up-gradation on public lands and many other innovative housing schemes. HUDCO provides a home loan under the scheme titled as, ‘HUDCO Niwas Loan’.  Let us now discuss the features, benefits and every other detail related to the loan scheme.

Home Loan

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    HUDCO Niwas Loan Purposes

    • Purchase of flat/house
    • Construction of home/flat
    • Buy plot from government agencies or reputed private property builders
    • Extend or improve the existing house/flat
    • Balance transfer of loan availed by a bank or other financial institution

    Features & Benefits

    ParticularsDetails
    Maximum Loan Tenure25 Years
    Interest Rate OptionFixed & Floating with the flexibility to switch between them at nominal charges
    Processing FeeNIL
    Prepayment PenaltyNIL
    Accidental Insurance CoverComes free with no additional charges
    Collateral SecurityApplicable. Your sought property will be the collateral security till the time loan is fully paid off.

    HUDCO Home Loan Interest Rates

    Interest Rate (p.a.) (floating)Interest Rate (p.a.) (fixed)
    8.75% onwards8.85% onwards

    HUDCO Home Loan Eligibility Criteria

    Eligibility ParametersSalariedSelf-employed
    Age25-65 Years25-65 Years
    IncomeMust be earning reasonably higherMust be earning reasonably higher

    HUCO Home Loan Eligibility Calculator

    Anxious to know how much loan you are expected to receive from HUDCO to buy a flat or home? I am sure you are. The loan amount will depend on the kind of earnings and savings you have each month. The home loan eligibility calculator will base its assumption on both the factors to arrive at an expected loan amount. You can understand deeply about the function of the calculator by taking the help of an example.

    For instance- Assume you work in a firm that offers you a salary of say ₹20,000 per month. You save ₹10,000. In that case, what will be the expected loan amount? The calculator, before arriving at the amount, will first calculate per lakh EMI based on a maximum loan tenure of 25 years and interest rate of 9.75%-11.75% per annum.

    Amount-₹1 Lac

    Interest Rate- 9.75%-11.75% per annum

    Tenure-25 Years

    Per Lac EMI-₹891-1,035

    Loan amount eligibility-₹1,00,000 x savings/per lakh EMI

    -₹1,00,000 x 10,000/891=₹11.22 lacs

    -₹1,00,000 x 10,000/1,035= ₹9.66 lacs

    So, the loan amount eligibility falls within ₹9.66 lacs-11.22 lacs

    Factors to Keep in Mind

    Age of Applicant- Home loan amount from HUDCO is dependent upon the age of an applicant. Normally, the housing finance firm lends to salaried and self-employed at the age of 21-60 years and 21-65 years, respectively. In some cases, the loan can extend upto to the age of 70 years. It is indeed advisable you opt for a loan at an early age of say in the 30s  rather than in the 40s. Because the loan amount is subject to the time left for the retirement. If you have years before your retirement, you can get a higher amount of loan compared to when you will have few years before you leave the professional life.

    Income- One thing that stands vital your cause of home loan sanction is the income you earn each month. Needless to say, you can get more loan if the income is on the higher side and vice-versa. But even in the case of lower income, you can enhance your loan amount eligibility by adding some earning family members as co-applicant. The members can be spouse, father, mother, son, daughter, etc.

    Property Value- Even though HUDCO has not stated as to how much of the property value will be financed as a home loan, the loan amount would be limited to 70%-80% of the value, given the existing market conditions. So, if you are buying a new or resale property, make sure you settle at a price matching with the loan amount that you can get from HUDCO. If the loan amount is lower than the agreed price, then you have to shell out extra from your pocket.

    Location– Bear in mind that the property you have chosen is not falling in the negative list of HUDCO. If it is the case, then the company may disapprove your home loan application.

    Approved Property- The property’s location can play spoilsport if it is not approved by the competent property development authority. In the absence of authorization, chances are huge that HUDCO would deny you a home loan.

    Job Status- With the documentation process requiring you to submit Form 16 for 2 years or so, you must have a work experience of 2-3 years. You receive Form 16 from your employer after the financial year.

    Business Continuity- Self-employed class is required to continue in the same business for at least 2-3 years as the ITR for as many time period is sought by HUDCO to approve a home loan.

    HUDCO Home Loan EMI Calculator

    Not aware of how much EMI you will have to pay each month towards a home loan? Start using the EMI calculator that will ascertain the EMI on the basis of loan tenure and interest rate. If you have availed a loan of ₹20 lacs for 20 years at the prevailing interest rate of 9.75% p.a., the EMI, interest outgo and total amount payable will be ₹18,970, ₹25,52,881, and ₹45,52,881 respectively, over the loan term.

    Documentation Required

    ProofsSalariedSelf-employed
    Duly Signed Application Form & PhotographsApplicableApplicable
    Identity ProofPAN Card, Voter ID, Driving License, Employee IDPAN Card, Voter ID, Driving License
    Address ProofAadhar Card, Latest Electricity Bill or Piped Gas Monthly Bill, Property Tax/Waiter Bill, Ration CardAadhar Card, Latest Electricity Bill or Piped Gas Monthly Bill, Property Tax/Waiter Bill, Ration Card
    Income ProofSalary Slip for Last 3 Months, Form 16 of Last 2 Years, Bank Statement of Last 6 Months Showing the Credit of SalaryITR for Last Three Years with Computation, Primary Bank Statement of Last 6 Months, Balance Sheet and Profit & Loss Account Audited by CA
    Property DocumentsCopy of Sale Deed, Allotment Letter or Any Other Document Supporting the Property TransactionCopy of Sale Deed, Allotment Letter or Any Other Document Supporting the Property Transaction
    Co-applicant or GuarantorApplicableApplicable

    HUDCO Home Loan Application Form

    Want to apply for HUDCO Home Loan? Visit the firm’s website, download the home loan application form and take a printout of the same The form will ask you to furnish personal, residential and income details of applicant/co-applicant, as well as loan details like purchase price of the property, loan amount requirement, etc. In addition, you need to fill details of your savings amount till now as well as indicate the sources of savings. After filling the details, you should keep ready the documents mentioned above. Submit the form along with the necessary documents to HUDCO to process your home loan application.

    After that, HUDCO will investigate the details and send an executive to visit the property you choose to buy. Going by the existing current market value and the conditions of the property, the executive will prepare a legal & technical report with respect to the property. Subsequently, HUDCO will set a valuation amount, which would then become a base for the loan amount disbursal. Even though HUDCO has not stated as to how much of the property value it finances as a home loan, the loan amount could range between 60%-80% of the valuation of the property.

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