ROLE OF HDFC IN HOUSING FINANCE IN INDIA A Project Report submitted in partial fulfillment of the requirements for BBA (III

semester) in Management

By: Vijayata Khanna Enrollment No. - 1121921708

Under the Supervision of Guide Name

Mr. Manoj Kumar

Department Of Management Lingayas Lalita Devi Institute of Management and sciences Affiliated to GGSIP University Kashmere Gate, New Delhi

CONTENTS PAGE NO.

1. Preface 2. Declaration 3. Acknowledgement 4. Introduction

4 5 6 7-17 7-11 12-17 18-21 22-23 24-25 26 27-46 27-38 39-46 47-56 56-76 77-78 79-92 83-85 86-88 89-91 92

a) Overview of housing in India b) Evolution of housing finance in India 5. Home Loans in India 5. Types of home loans in India
6. Tax Benefits on Home Loans 7. Home Loans Providers in India 8. Housing Finance Companies a) Public Institutions b) Private Institutions 9.

HDFC Bank

10. Mile Stone- 30 Years 11. HDFC Home Loan Advantage 12. HDFC Home Loan a) b) c) d)

Home Loan Improvement Home Extension Loan Home Equity Loans Application Form

13. Objective/Scope 14. Research Methodology 15. Limitations

93 94 95 96 97-98 99 100-103 100 101-103

16. Suggestions 17. Conclusion

18. Bibliography 19. Appendix a) Housing Finance (FAQS) b) Home Loan (FAQS)

PREFACE
Its a matter of great pleasure that we the student of B.B.A III semester have undertaken the project Role of HDFC in Housing Finance in India. Against the milieu of rapid urbanisation and a changing socio-economic scenario, the demand for housing has grown explosively. The importance of the housing sector in the economy can be illustrated by a few key statistics. According to the National Building Organisation (NBO), the total demand for housing is estimated at 2 million units per year and the total housing shortfall is estimated to be 19.4 million units, of which 12.76 million units is from rural areas and 6.64 million units from urban areas. The housing industry is the second largest employment generator in the country. It is estimated that the budgeted 2 million units would lead to the creation of an additional 10 million man-years of direct employment and another 15 million man-years of indirect employment. Having identified as a priority area in the Ninth Five Year Plan (1997-2002), the national housing policy has envisaged an investment target of Rs. 1,500 billion for this sector. In order to achieve this investment target, the government needs to low cost funds easily available and enforce legal and regulatory reforms. I would like to thank Mr. Manoj Kumar (Faculty Guide) under whose guidance and care I am able to come up with this analysis. It was their continuous support and boosting morale due to which I am able to succeed against all the odds. I must concede that this project would never have been written without the support, encouragement and prodding of my family members.

DECLARATION
I hereby declare that the project report, entitled Role of HDFC in Housing Finance in India is based on my original study and has not been submitted earlier for any degree or diploma of any institution/ university. The work of author(s), wherever used, has been acknowledged at appropriate place(s). Place: New Delhi Date: Candidates Signature Name: Vijayata Khanna Enrollment No: 1121921708

Countersigned

Mr. Manoj Kumar Supervisor Lingayas Lalita Devi Institute of Management and Sciences

ACKNOWLEDGEMENT

This project work has been a great experience on Role of HDFC in Housing Finance in India. This work would not have been possible without the help, cooperation, constructive suggestion and well wishes of many people. I would like to thank all of them, as I mention a few here. I owe my profound respect to Mr. Manoj Kumar, my project guide, and express my deep sense of gratitude and indebtedness for his inspirations, valuable and scholarly guidance, imperative suggestions and personal attention at each stage of the Work. His gamut of knowledge, dedication towards research, exemplary devotion and trust towards me has been unique and is the prime key behind the success of this project. His personality has been instrumental in blending an exciting spirit and atmosphere for research. It has been a great opportunity and experience to work with him, as I will forever cherish the deep interaction I had with him. Finally, I am most grateful to my parents for their moral support and blessings and for being an immense source of inspiration for me all through my life.

INTRODUCTION OVERVIEW OF HOUSING IN INDIA

India is home to over 1.1 billion people. With about one in every sixth person in the world living in India, housing perforce assumes significant importance. Successive Indian governments have regarded housing as a primary need of its people. The need to provide affordable housing has been the reason behind state interventions in the sector. Housing policies, however, tended to be framed by the government from a social rather than economic perspective. Despite explicit recognition of the need for housing, housing programmes received low public investment. Housing and subsidies were largely synonymous and hence the tendency to view housing finance from the angle of the governments cash budget and not as a developmental activity with tremendous spin-offs to the economy. A significant trigger of change in housing policies in India occurred pursuant to the Global Shelter Strategy adopted by the United Nations (UN) in November 1988. These resolutions encouraged individual countries to establish comprehensive, multi-faceted housing programmes to provide shelter for all. The Global Shelter Strategys main aim was to ensure social, economic and environmental sustainability while simultaneously upgrading living conditions. A defining feature of the resolution was that it sought to involve national governments, private bodies as well as non-governmental organisations in formulating housing programmes. This provided the impetus to the Indian government in drafting its first National Housing Policy, which was tabled in Parliament in 1992 and adopted in August 1994. Subsequently, with a national agenda of shelter for all, a new Housing and Habitat Policy was adopted in 1998. This proved to be a watershed with the governments recognition that it should withdraw from direct participation in the housing and housing finance sector and instead take on the role as facilitator, thereby creating an enabling environment to encourage private sector capital. In 2000, UN members adopted eight Millennium Development Goals ranging from eradication of poverty to developing a global partnership for development. For housing though, it was the seventh goal that would prove to be important. Goal 7 called for ensuring environmental stability and assigned UNHABITAT the responsibility of assisting states to monitor and gradually attain the Cities Without Slums target, popularly known as Target 11. This target calls on member states to achieve a significant improvement in the lives of at least 100 million slum dwellers by 2020. For India, this will prove to be daunting. In 2001, Indias population estimated to be living in slums was 61.8 million (Ministry of Urban Employment, 2005).

Role of Housing
Macroeconomic stability and the housing sector are inextricably linked. It is estimated that for one Indian Rupee (Rs.) invested in housing; Rs. 0.78 gets added to the gross domestic product of the country. The housing sector has strong backward and forward linkages to over 250 ancillary industries. After agriculture, the housing and real estate industry is the second largest employment generator. It is estimated that the construction sector provides direct employment to 16 percent of the countrys workforce, which is growing at a rate of 7 percent 4per annum. The housing sector alone accounts for 58 percent of workers in the construction sector. However, nearly 55 per cent of these workers are in the unskilled category.

shortage of Housing
Official and updated statistics on the shortage of housing units in the entire country is not readily available. According to the National Buildings Organisation (NBO), the components of housing shortage include (a) the excess of households over houses, including homeless households, (b) congestion i.e. the number of married couples requiring a separate room, (c) replacement or upgradation of unserviceable houses and (d) obsolescence/replacement of old houses. The last official estimate on the shortage of housing units was from the NBO which estimated a total shortfall of 19.4 million units comprising 6.6 million units in urban areas and 12.8 million units in rural areas. Further, over 90 percent of this shortage is for the poor and low-income category (Ministry of Urban Affairs, 1998). This, shortage however, is based on the 1991 Census figures and thus is outdated. The unofficial estimate of the housing shortage is currently pegged at over 40 million dwelling units. Despite the absence of reliable statistical information, the growing population and increasing urbanisation has resulted in rising pressure on the available housing stock.

Planning Commission estimates, the total requirement of urban housing during the tenth five year plan, covering the period 2002-2007, is 22.44 million dwelling units in urban areas. This comprises two components - an urban housing backlog of 8.89 million dwelling units estimated at the beginning of 2002 and an addition of 13.55 million new dwelling units. As per the Census 2001, housing completions (defined as the absolute increase in housing stock during a particular period) is around 5 houses units per 1,000 population per annum in India. The average annual housing completion in urban areas per 1,000 population was steady at around 7 housing units during the past three decades. This however, is lower than the minimum threshold as recommended by the United Nations of 8 to 10 housing units per 1000 population for developing countries (NHB Trend and Progress Report, 2004).

Table 1.1: Addition of Census Houses per 1,000 Population 197181 Urban
Added Census Houses (million) Added Households (million) Annual Housing Completions/1,000 population

1981-91
11.55 10.00 7.23 16.55 11.64 7.61

1991-01
19.53 12.95 6.83

Rural
Added Census Houses (million) Added Households (million) Annual Housing Completions/1,000 population 19.25 15.50 3.66 29.02 19.16 4.62 34.56 25.61 4.65

Total
Added Census Houses (million) Added Households (million) Annual Housing Completions/1,000 population 26.53 25.50 3.87 45.58 30.80 5.39 54.08 38.56 5.26

Housing Conditions in India

Housing conditions are a key indicator of socio-economic development. The National Sample Survey Organisation (NSSO) uses the classes, katcha, semi-pucca and pucca to differentiate between the types of homes in India. A katcha house is built with non-durable materials like unburnt bricks, mud, thatches, leaves and bamboo. A pucca house is one built with permanent materials like oven burnt bricks, concrete, stone blocks, cement, iron or other metal sheets and timber. A semi-pucca house is built with both katcha and pucca materials.

Table 1.2: Percentage Distribution of Households with DwellingUnits by Type of Structure

(Figures in %) Area Type Rural Urban (including slum and squatter areas)

Pucca
36 77

Semi-Pucca
43 20

Katcha
21 3

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Table 1.2: demonstrates that the majority of households in India live in either pucca or semi-pucca homes. This situation has improved gradually over the years. In 2002, 36 percent of those in rural areas lived in pucca homes as opposed to 32 percent in 1993. In urban areas, the percentage of pucca homes increased to 77 percent in 2002 from 74 percent in 1993 (NSSO, 2004). Further, statistics show that exclusive amenities available in homes are also improving. There, however, still exists a wide disparity between amenities available in rural and urban areas as well as amenities available to various income groups. Table 1.3: demonstrates the change over the last three decades. Further, the 2001 Census data on conditions of homes were recorded on a scale of good, livable or dilapidated based on the perception of the respondent. Of the total number of 192 million households surveyed, 96 million responded as living in houses which they considered as good, 85 million households responded as livable and the remaining 11 million responded as living in dilapidated conditions.

Table 1.3: Distribution of Housing by Exclusive Amenities (Figures in %) Amenities Urban (%)
Safe drinking water Toilet facilities Electricity Connections

1981

1991

2001

74.10 57.40 61.60

81.60 63.60 75.90

90.60 73.70 87.60

Rural (%)
Safe drinking water Toilet facilities Electricity Connections 26.30 14.30 55.90 8.80 31.10 80.50 21.90 43.50

All-India (%)
Safe drinking water Toilet facilities Electricity Connections 37.90 25.70 62.70 23.50 43.00 83.30 36.40 55.80

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EVOLUTION OF HOUSING FINANCE IN INDIA

Housing has been classified as a basic need in India and successive governments have highlighted its priority status. Despite such emphasis, housing policies largely remained statements of intent rather than being translated into implementation. Earlier Indian Governments tended to view housing from a social perspective rather than an economic one, and the policies of the time reflected this. Today, the scenario has changed. Players like commercial banks and housing finance companies have made efforts to develop the mortgage market and increase the availability and affordability of housing. The early development of housing finance in India is a result of the housing policies implemented by the government. A clear perspective on the evolution of housing policies in India can be seen in the Five Year Plans, which were based on a centrally planned mode of development. Development activities in India have been structured on the basis of Five Year Plans since 1951.

Housing in the Five Year Plans

In the first plan (1951-56), housing was introduced into the policy framework at the national level. Affordability was emphasised as the key issue and government support through subsidies and loans were deemed necessary. A separate Ministry of Works and Housing was established and the National Buildings Organisation was created. This plan in fact became the benchmark for subsequent Five Year Plans for the next two decades. The second plan (1956-61) strengthened the schemes of the first plan by expanding coverage. However, there was a policy shift as the central government decided to provide assistance to state governments to develop low-income housing instead of directly providing loans to low-income groups. This gave rise to State Housing Boards that still remain in existence today. The third plan (1961-66) and an annual plan (1966-69) placed emphasis on planned development and land acquisition, particularly for urban areas. Although both plans continued the schemes of the previous plans, there was an additional thrust towards targeting low-income groups. State Housing Boards had their resources increased and were expected to address the housing shortfall in their respective states.

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Despite these efforts, by the fourth plan (1969-74) the government was faced with the dual problem of a rapidly growing population and a slow growing housing stock. For the first time, the government decided to encourage private and co-operative housing schemes by providing financial assistance. However, the majority of activity still remained within the public sector. The government also recognised the need to provide housing finance to low-income groups and thus set up the Housing and Urban Development Corporation (HUDCO) in 1970. HUDCOs mandate was to provide such groups with loans below peak interest rates and with longer repayment periods. It was during the fifth plan (1974-79) that the Urban Land (Ceiling and Regulation) Act (ULCRA) was introduced. ULCRA sought to prevent concentration of land holding in urban areas and make more land available for equitable disbursal. However, it failed to achieve its goals and its repercussions are still being felt today. Significantly, as a completely private sector initiative, in 1977, the first retail housing finance company, Housing Development Finance Corporation (HDFC) was set up. HDFC sought to provide financial assistance to individuals, groups, co-operative societies and companies for staff housing. In a move to cope with increasing urbanisation, the thrust of the sixth plan (1980-85) was aimed at increasing housing in small and medium towns. Efforts were made towards improving the conditions of the slums and the lives of its inhabitants, while emphasising the need to increase support to private groups. During this period, other housing finance companies also entered the market. It was the seventh plan (1985-90), that brought about a radical change in government policies. It was also during this time that several reforms were made. The UN Global Shelter Strategy, of which India subscribed to, was passed in the UN General Assembly in 1988. This gave the impetus to the drafting of a National Housing Policy for the first time. Another major reform that took place at the time was the founding of the National Housing Bank (NHB) in 1988.

The NHB was founded to promote and regulate housing finance companies and to mobilise additional resources for housing. A Building Materials and Technology Promotion Council was also formed. During this period, several housing finance companies were promoted. Commercial banks still shied away from direct lending to housing finance.

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The eighth plan (1992-97) built on the foundations of the seventh plan, again acknowledging that housing related activities belonged in the private sphere, although admitting that there was room for state intervention to provide housing to low-income groups. It was during the eighth plan that the National Housing Policy was first adopted by Parliament in 1994. Importantly, the plan recognised that urbanisation was inevitable and concentrated resources on upgrading urban centres. It recommended that reforms should be made on both, the financial and legal aspects to allow the mortgage market to develop further. It laid special emphasis on government incentives to enhance the flow of credit to the housing sector through housing finance institutions. Both the ninth (1997-2002) and tenth (2003-2007) plan recommended further reforms to enable the government to play its role as a facilitator and encourage the development of the mortgage market. Emphasis was particularly laid on market friendly reforms for improving both taxes and infrastructure to help increase investments into housing. Both plans stress on abolishing old laws. In 1999, the central government repealed ULCRA. The government also adopted a revised National Housing Policy in 1998 and prepared another draft in 2005. The ninth and tenth five-year plans are also characterised by the aggressive entry of commercial banks into housing finance.

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Planned Investment
The total investment proposed in housing has increased from Rs. 11.5 billion under the first plan to Rs. 7.26 trillion (US $ 0.15 trillion) in the tenth plan. However, the absolute investment in housing as a percentage of the total plan investment has declined due to the shift in the governments emphasis from provider to facilitator.

Table 1.4: Investment Requirement for Housing during the FiveYear Plans (Rs. Billion) Plan Peri od
1st (1951-56) 2nd (1956-61) 3rd (1961-66) 4th (1969-74) 5th (1974-79) 6th (1980-85) 7th (1985-90) 8th (1992-97) 9th (1997-02) 10th(2003-07)*

Public Investment

Private Investment

Total Investment

2.50 3.00 4.25 6.46 7.96 14.91 24.58 315.00 520.00 4,150.00 11.25 21.75 36.40 180.00 290.00

9.00 10.00 15.50 28.00 44.36 194.91 314.58 660.00 990.00 3,113.00

11.50 13.00

975.00 1,510.00 7,263.00

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Development of the Formal Housing Finance System

The beginning of formal housing finance in India first came with the setting up of HUDCO in 1971. HUDCO sought mainly to cater to low-income groups, but at the same time provided technical and financial assistance to State Housing Boards, urban development institutions and to the co-operative sector. Private sector involvement in retail housing finance did not begin until the setting up of Housing Development Finance Corporation Limited (HDFC) in 1977. HDFC specialises in providing housing finance to individuals, co-operative societies and the corporate sector. HDFCs initial share capital included subscription from His Royal Highness the Aga Khan and International Finance Corporation, Washington (IFC). Towards the mid and late 1980s a few housing finance companies were set up either as private limited companies (e.g. Dewan Housing Finance Limited) or as a joint venture with partnership from the state government (e.g. Gujarat Rural Housing Finance Corporation) or bank sponsored housing finance companies (e.g. Can Fin Homes, SBI Home Finance, PNB Housing Finance). Even state owned insurance companies like the Life Insurance Corporation and the General Insurance Corporation of India set up housing finance arms.

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Role of Banks in Housing Finance

The Reserve Bank of Indias initial efforts to encourage commercial banks in housing finance came in the form of directed credit. This included mandating banks to lend to housing finance intermediaries at the banks prime lending rate less 150 basis points and annually allocating 1.5 percent of their incremental deposits in the previous year for housing finance. Overtime, as the Reserve Bank of India made a bid to move away from directed credit, the mandated lending below prime rates to housing finance companies was removed in 1998, though the allocation for housing finance was increased to 3 percent of incremental deposits. Bank lending under housing comprises three components: direct lending which entails banks themselves extending housing finance loans, indirect lending where banks lend to approved housing finance companies or state housing boards which on-lend for housing finance and lastly, investments in mortgage-backed securities underlying loans securitised by housing finance companies. Domestic scheduled banks and foreign banks are required to extend a minimum of 40 percent and 32 percent respectively of their net bank credit to the priority sector with sub-targets for lending to various sectors. Priority sector lending inter alia comprises agriculture, small-scale industries, small businesses, retail trade, lending to state sponsored organisations for scheduled castes/tribes and education. It was as late as 1990 when the Reserve Bank of India put housing finance on its list of priority sectors (World Bank, 2004). For a direct housing loan to qualify as priority sector, each loan should not exceed Rs. 1,500,000 (US $33,333) irrespective of whether a house is in a rural, semi-urban or urban area. As regards indirect housing finance, each loan should not exceed Rs. 500,000 (US $ 11,111) to qualify for priority sector lending. It was not till the late 1990s that banks actively got involved in housing finance. Against the backdrop of lower interest rates, industrial slow-down, sluggish credit off-take and ample liquidity, commercial banks recognised that if they had to maintain their profit margins they needed to shift their focus from the wholesale segment and build their retail portfolios. The lower interest rate regime, rising disposable incomes, relatively stable property prices and fiscal incentives made housing finance an attractive business. Further, housing finance traditionally has been characterised by low non-performing assets and given the vast demand for housing loans, almost all the major commercial banks plunged into the business of home loans.

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HOME LOANS IN INDIA

The home loan sector in India is the pi-vital role player in the growth of the real estate scenario in India. With tax incentives given to the housing finance sector in the annual budget of 2001, transactions related to buying and selling of residential properties increased considerably and was much higher as compared to previous years. Since the new class of buyers are relatively younger set of customers who are more aware about legal documentation and approvals, buyers are now more 'end-users' rather than investors; the property market in India undergoes transformation to align itself with global standards with an increased emphasis on quality & cost control and documentation methods. In the current economy of India, the real estate sector has the maximum propensity to generate income and demand for materials, equipment and services. It can be said that housing finance companies were formed for co-existing with buyer's requirements of housing loans for investing in properties. Home loans are made available by financial institutions to both Indian and NRI customers at floating and fixed rate of interest and also at attractive EMI options.

For construction or buying a new home For home repairs and renovations For purchase of plots Against mortgage of property

No tax benefits are available for NRI customers unless you file returns and thereby become eligible to avail of the tax benefits. Besides home loans, commercial property loans are also available and different financial institutions in India provide commercial loans at different rates and different upper limits. Real estate loans are available to builders, promoters and real estate developers. The experience and financial standing of the builders is taken into account before the loan is granted which is to be returned with the minimum installments. Today, the amount of money that a city dweller spends on rent is roughly the same, or only slightly less than the amount he pays as an EMI on a housing loan. Earlier the home loan sector in India was solely dependent on nationalized and public sector banks, but the entry of public sector banks into the housing finance business marked the beginning of the first round of interest rate cuts. And this reduction in interest rates has enhanced the borrowing power of customers. Moreover, HFCs are offering incentives to attract investors like

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Some companies sanction the housing loan without requiring you to identify property as a pre-requisite for eligibility Free accident insurance & property insurance Waiving of pre-payment penalty Waiving of processing fee

There are a few documents which the finance companies require for setting up criteria for eligibility of Home loans.

Salaried Employee
The latest salary statutory deductions slip

Self-employed
showing Computation of income for the previous two years, certified by a Chartered Accountant

Form 16 (showing tax deducted at Profit & Loss Account and Balance source by employer) Sheet for the previous two years, certified by a Chartered Accountant Proof of age (birth certificate/voter Proof of age (birth certificate/voter identity card/passport/school-leaving identity card/passport/school-leaving certificate/valid driving license certificate/valid driving license) Proof of residence (phone Proof of residence (phone bill/electricity bill/ration card). bill/electricity bill/ration card). The realty boom in India has given a new dimension to the finance sector in india- both in Home Loans and Home insurance segments. This has not only given a competitive edge to the finance companies to provide attractive options to customers but has also contributed to the increased investments in the real estate sector. This has resulted in 13 new institutions foraying into the housing finance business in the last three years.

Major Home Loan Providers Banks & Public Sector Housing Finance Companies Financial Institutions
State Bank of India, Corporation Bank, Punjab National Bank, Central Bank, Dena Bank, Allahabad Bank, Bank of Maharashtra, Bank of Baroda Housing Finance, Can Fin Homes, GIC Housing Finance, LIC Housing Finance, PNB Housing Finance, SBI Home Finance, Centbank Home Finance, HUDCO, LIC, etc. HDFC, ICICI Ltd, Citibank, HSBC, StandardCharteredGrindlays, IDBI Bank, etc

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Home Loan Interest Rates

Interest Rates for Home Loans are undoubtedly the most important parameter to factor into your calculations. And in most cases is the decisive factor for an investor to narrow down on a certain housing finance company's home loan offer. The interest on housing loans in India is usually calculated either on monthly reducing or yearly reducing balance basis.

Comparative Chart on Home Loan Interest Rates Financial Institutions State Bank of India Tenure Rate (in Interest years) Fixed
Up to 5 years 5-20 years 12.25% 12.25 % 10.5% 10.5%- 11%

of Rate Interest Floating

10.75% 11.25 % 9.5% 9.5%

of Processing Charges
0.50% of loan amount 1% of loan amount 0.5 per cent of the amount (max. Rs. 5000) 1% of the loan amount +applicable service taxes and cess) 1% of loan amount 1% of loan amount 1.25 % of loan amount 1.25% of loan

ICICI LIC Housing Finance Ltd. HDFC

0-20 years 0-20 years 0-20 years

13.25%

11.25%

HSBC Citibank Canara Bank

0-20 years 0-20 years Up to 5 years

10.75% 9.75% 10.75%

9.00% 9.25% 9.25 % (for <20

Above 5 11.00% yrs up to 10 yrs 0-20 Standard Chartered Bank years 10.5% 9.25%-12% 10.5 % (for <20

Canfin Homes Ltd IndusInd Bank

0-20 years 0-20

20

years

lakhs) 13% (for >20 lakhs) 11

lakhs) 12% (for >20 lakhs) 10

amount

Saraswat Bank HUDCO

0-20 years 0-20 years

0.5 % of loan amount (Max. Rs.250)

10 % (< 10 lacs) 9% (< 10 lacs) 10.5% (>10 lacs) 9.5% (>10 lacs)

Most HFCs follow the yearly reducing-balance method, which accounts for your principal repayments only at the end of their financial year. Thus, you pay interest on the principal that you have already returned to the HFC. The effective interest rate is thus higher than the quoted interest rate by around 0.7%. Banks and some HFCs, on the other hand follow the daily or monthly reducing-balance method, by which the principal on which you pay interest reduces every month as you pay your EMI resulting in a lower interest burden. Thereby, the EMI for the monthly reducing system is effectively lesser than the yearly reducing system of calculating interest. Moreover, there are two kinds of interest rates for housing finance in India - Fixed rate and Floating rate interests. Some HFC's have fixed rate of interest which means that the interest rates remain unchanged for the entire duration the loan. This basically means that you do not benefit, even if the rates of interest drop in the market while the floating rate interest fluctuates according to the market lending rate. The interest rates may vary from institutions to institutions and generally range from about 12.5% to around 16%. Repayment is in the form of EMI's (equated monthly installments) so, longer the tenure, the more you pay in interest, but your monthly payment will be less. Generally, the maximum tenure of home loans is 15 years, with a few lenders offering tenure of 20 years or more (ICICI has recently launched a 30 year loan). The longer the tenure, more you pay in total interest, but your monthly payments will be less. So depending on your earning potential and bank balance, you can choose an appropriate tenure. An important requirement of most banks/HFCs is that you pay up the entire loan before you retire. The Housing Finance Companies and the Banks have variable interest rates depending upon the tenure and types of home loans. Though interest rates for housing finance are not very volatile, one may well be advised to look out for indication of any rate increases or decreases prior to finalizing the timing and amount of loan.

TYPES OF HOME LOANS

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A person seeking investments for house or a property opts for Home Loans for a variety of purposes ranging from construction to renovation. The Housing Finance Companies (HFCs) now offer individuals with various alternatives to choose from while buying a home loan. And the availability of Home Loans offered is as varied as their requirements.

Home Purchase Loans Home Construction Loans Home Improvement Loans Home Extension Loans Home Conversion Loans Land Purchase Loans Stamp Duty Loans Bridge Loans Balance Transfer Loans Refinance Loans Loans to NRIs

Home Purchase Loans:

This is the basic home loan for the purchase of a new home.

Home Construction Loans:

This loan is available for the construction of a new home on a said property. The documents that are required in such a case are slightly different from the ones you submit for a normal Housing loan. If you have purchased this plot within a period of one year before you started construction of your house, most HFCs will include the land cost as a component, to value the total cost of the property. In cases where the period from the date of purchase of land to the date of application has exceeded a year, the land cost will not be included in the total cost of property while calculating eligibility.

Home Improvement Loans:

These loans are given for implementing repair works and renovations in a home that has already been purchased, for external works like structural repairs, waterproofing or internal work like tiling and flooring, plumbing, electrical work, painting, etc. One can avail of such a loan facility of a home improvement loan, after obtaining the requisite approvals from the relevant building authority.

Home Extension Loans:

An extension loan is one which helps you to meet the expenses of any alteration to the existing building like extension/ modification of an existing home; for example addition of an extra room etc. One can avail of such a loan facility of a Home extension loan after obtaining the requisite approvals from the relevant municipal corporation.

Home Conversion Loans:

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This is available for those who have financed the present home with a home loan and wish to purchase and move to another home for which some extra funds are required. Through a home conversion loan, the existing loan is transferred to the new home including the extra amount required, eliminating the need for pre-payment of the previous loan.

Land Purchase Loans:

This loan is available for purchase of land for both home construction or investment purposes

Stamp Duty Loans:

This loan is sanctioned to pay the stamp duty amount that needs to be paid on the purchase of property.

Bridge Loans:
Bridge Loans are designed for people who wish to sell the existing home and purchase another. The bridge loan helps finance the new home, until a buyer is found for the old home.

Balance-Transfer Loans:
Balance Transfer is the transfer of the balance of an existing home loan that you availed at a higher rate of interest (ROI) to either the same HFC or another HFC at the current ROI a lower rate of interest.

Re-finance Loans:
Refinance loans are taken in case when a loan for your house from a HFI at a particular ROI you have taken drops over the years and you stand to lose. In such cases you may opt to swap your loan. This could be done from either the same HFI or another HFI at the current rates of interest, which is lower.

NRI Home Loans:

This is tailored for the requirements of Non-Resident Indians who wish to build or buy a home or property in India. The HFCs offer attractive housing finance plans for NRI investors with suitable repayment options.

TAX BENEFITS ON HOME LOANS

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As the Indian real estate market makes an upward swing, and investors opt for housing finance or home loans, tax benefits obtained from them is a lucrative option. Customers availing of Home Loans can claim a certain portion of the interest and principal that they pay towards the loan installments for reducing tax liability. Resident Indians are eligible for certain tax benefits on principal and interest components of a loan under the Income Tax Act, 1961. Moreover, an added tax benefits under Sec 80 C on repayment of principal amount up to Rs. 1,00,000 p.a. can be availed that can further reduce your tax liability by about Rs. 30,000 p.a. Tax benefits can be claimed on both the principal and interest components of the home loan as per the Income Tax Act, 1961. These deductions are available to assesses, who have taken a loan to either buy or build a house, under Section 24(b). Interest on borrowed capital is deductible up to Rs 150,000 if the following conditions are satisfied:

Capital is borrowed on or after April 1,1999 for acquiring or constructing a property. The acquisition/construction should be completed within 3 years from the end of the financial year in which capital was borrowed. The person, extending the loan, certifies that such interest is payable in respect of the amount advanced for acquisition or construction of the house A loan for refinance of the principle amount outstanding under an earlier loan taken for such acquisition or construction.

If the conditions stated above are not fulfilled, then the interest on borrowed capital is deductible up to Rs 30,000 though the following conditions have to be satisfied:

Capital is borrowed before April1,1999 for purchase, construction, reconstruction repairs or renewal of a house property. Capital should be borrowed on or after April1, 1999 for reconstruction, repairs or renewals of a house property. If the capital is borrowed on or after April1,1999, but construction is not completed within 3 years from the end of the year, in which capital is borrowed.

In addition to the above, principal repayment of the loan/capital borrowed is eligible for a deduction of up to Rs 100,000 under Section 80C from assessment year 2006-07.

Terms and conditions for availing Tax benefits on Home Loans

1. Tax deductions can be claimed on housing loan interest payments, subject to an upper limit of Rs 150,000 for a financial year. Interest on the fresh loan can be claimed as a deduction, subject o the stated upper limit. 24

2. An additional loan for extension/addition to the same house and the person's deductions on the existing loan are less than Rs 150,000; he can claim further benefits from the additional loan taken, subject to the upper limit of Rs 150,000 for a financial year. 3. Tax benefits under Section 24 and deduction under section 80C of the Income Tax Act can be claimed only when the payment is made. If a person fails to make EMI payments, he cannot claim tax benefits for the same. 4. According to the Income Tax Act, only the person who has taken the loan can claim tax rebates. 5. The interest on home loans taken for repairs, renewals or reconstruction, also qualifies for the deduction of Rs 150,000. 6. A husband and wife, both of whom are tax-payers with independent income sources, get tax deduction benefits, with respect to the same housing loan; to the extent of the amount of loan taken in their own respective name. 7. If a person buys a house and sells it within the same year/after 3 years, and if any profit is made, then a capital gains tax liability arises on the same for which the individual is liable to pay short-term capital gains tax since the sale took place in the same year. But, if the sale had taken place after 3 years, then a longterm capital gains tax liability would have arisen. 8. If it is proved that the home loan is simply an arrangement between the loanseeker and the builder or with a third party for the purpose of claiming tax benefits, then tax benefits will not be allowed and benefits, previously claimed, will be clubbed to the income and taxed accordingly. 9. Tax benefits on interest on housing loans are allowable only for the original loan and for a second loan taken to repay the first loan and not for subsequent loans. This means that if you have already availed of one loan to refinance the original loan and want to now avail a third loan to refinance the second loan, tax rebate on interest payments will not be permissible. This is because the Section 24 (1) only talks of the second loan and not of subsequent loans. Even if you take the second loan at a rate of interest higher than the original loan, you will be eligible for a tax rebate on the second loan.

HOME LOANS PROVIDERS IN INDIA

Real estate in India is currently one of the hottest investments options in Asia A recent survey of the real estate scenario acknowledge the Indian metropolis of Mumbai Bangalore and New Delhi as the top three investors' choices for real estate investment in Asia. But there were concerns mainly related to the availability of necessary funds 25

for investment and in the more recent times, the boom in the real estate market opened the doors for a host of realty funds from financial institutions. Prior to five years, the real estate segment in India was neither organized nor were there too many large institutions in the construction industry. But now with an organized finance sector and with the increase in transparency levels, it has become easier to create financing vehicles. The decrease in housing loan interest rates and an increase of disposable income has contributed largely to an increased demand in the residential segment. In spite of a rise in home loans interest rates and qualitative sanctions being levied by the RBI on banks, buying interest has not waned because home loans are still cheaper than ten years ago. The retail markets are also undergoing a defining change with the introduction of larger retailing formats. The financial institutions also wasted no opportunity in tapping the fund requirement catering to the inflow of potential buyers in the retail sector. While most funds were initially floated by financial Institutions or banks such as HDFC, ICICI Bank and IDBI Bank to name a few, real estate developers like DLF Universal and even retailers such as Pantaloons Retails (India) have now entered the real estate sector for creating more retail facilities and have been successful. As the realty prices in India skyrockets, housing complexes mushrooming and city landscapes becoming unrecognizable, the growth across all real estate segments and experts estimate that demand will remain steady at the currently high levels because of the improving economic environment and the real estate sector is expected to grow 30% every year. This rising property prices encourage banks and financial institutions to lend more with the increase in collateral values. Although the home loan providers have hiked their rates twice in less than three months, home loans continue to be nearly 45 per cent cheaper than what they were in early 2001. Because if statistics are referred to, the interest rates which now range between 9-10 per cent, are still much lower than what they were ten years ago, at 16-17 per cent. In addition to funds being raised by the Indian financial institutions like HDFC, ICICI and IDFC abroad, the money could be used to develop business and IT parks and townships. A study has revealed that as many as one million homes are financed every year in India now with an estimated home mortgages market of US$ 10.7 billion contributing to India's phenomenal realty prospect.

HOUSING FINANCE COMPANIES

Public Institutions

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BANK OF BARODA Housing Finance Ltd. Schemes of loan by Bank of Baroda for purchase of residential plots by individuals Purpose
For purchase of land /site from Govt./statutory bodies such as housing boards, Development Authorities/CIDCO etc.

Eligibility

Permanent salaried employees/self employed persons with own business or profession/pensioners. Age Limit: Not more than 65 yrs of age.

Co-applicant should be

Spouse Son/daughter-in-law Father/mother Co-owner of property to be purchased /mortgaged.

Amount

(Least of the following subjects to minimum of Rs. 50,000/-) 85% of the cost/purchase price of the land. Rs.100 lacs 42 months gross salary or 3 1/2 times of average annual income as per income tax returns last 3 years of whichever is less.

Repayment

Max.20 years or 70 years of age whichever is earlier in equated monthly installment (EMI).

Rate of Interest:
The current interest rates are as under:

FIXED RATE OPTION TENURE NEW

27

RATE
1-5 6-10 11-20 9.00% 9.25% 9.75%

VARIABLE OPTION NEW TENURE RATE

1-20 9.75%

Interest will be calculated on annual rest basis. Installment to commence from the next month, from the month in which loan is fully disbursed or expiry of 1 1/2 year from the date of first disbursals whichever is earlier. Pending EMI, Pre-EMI interest is to be paid on monthly basis on loan disbursed.

Security

Equitable mortgage of the plot of land to be purchased. Personal guarantee of one individual. Usual Loan Documents.

Charges

0.80% of amount of loan applied as processing charges (Presently nil). 1% of sanctioned loan amount as administrative charges Application form Rs.10/-

Others
For plot purchase an undertaking to the effect that construction would start within 12 months after the sanction of the Home Construction loan has to be submitted by the borrower failing which commercial interest rate would be charged from him.

Canfin Home Loans Housing Loan Schemes for Resident Indians

After having seen over a lakh satisfied customers secure their own homes, Can Fin Homes now looks toward your home financing requirements. Having spent over a decade in the home finance business, we are well placed to understand the significance

28

and importance of your need to own a home. This section is here to do just that, see you realise the dream of owning a home, as swiftly and smoothly as possible. To help us assess your home financing requirements better, please indicate in the check boxes provided alongside, as to which of the home owning categories you come under:

Finance for the construction of a house. Loan for the purchase of a flat or house. Finance for the acquisition of a plot and construction of a house on the same, under the composite housing loan scheme. A loan for the extension of your existing house. Loan towards the repairs, renovation and upgradation of your house or flat.

Eligibility
You are eligible for a home loan from Can Fin Homes, if you are

Earning a regular monthly income. Salaried individual with minimum of 5 years of service left. A professional /self employed/Business man with age less than 58 years having filled IT returns during the last 3 years. Having a clear and marketable title of the property and want to avail for purchase /construction/repair and renovation /extension.

If your spouse is earning, put him/her as a co-applicant. The additional income shall be included to enhance your loan amount. Incidentally, if there are any co-owners they must necessarily be co-applicants. Co-applicants need not be co-owner of the property.

Easy home loans

Getting a home loan from Can Fin Homes is easier because of "Friendship Finance". The main focus at Can Fin is to understand you before we go about understanding and assessing your loan requirements. The human element of trust, confidence and friendship is as important to us as your loan financing is. Our trained and courteous staffs ensure that you are first at ease and in full confidence with them, before anything else. We at Can Fin call it "Friendship Finance" since we believe in making friends with you, before we finance your requirements.

Once you have familiarized yourself with our personnel and understood the terms and conditions of the financing, then there's very little paperwork you need to do. In fact, the paperwork required by Can Fin Homes to clear your application, is perhaps the least in the entire home finance industry! So don't wait any longer, the details of the documents you must provide are given in this section.

How much amount you get a loan

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Upto Rs. 1,00,00,000/- depending on your repayment capacity. Repayment capacity will be considered after assessing your income, age, qualifications, work experience, number of dependents, spouse's income, stability of income and employment, assets, liabilities, etc.

You can apply for a loan upto

80% in the case of site loan and 85% of total project cost for the remaining section depending on your repayment capacity.

Items which can included in the project cost

For composite Loan Total estimated construction cost including interiors and land cost For purchase of ready built flat/house Cost of flat/house(Registered value), registration charges, stamp duty etc For purchase of flat under construction Cost of flat, interiors, deposit, car parking, other amenities etc For purchase of site Cost of site (Registered value), registration charges and stamp duty.

Your loan repayment will be

5 - 10 years for site loans , 5 - 20 years for other loans. They are payable in easy, Equated Monthly Installments

Documents to be submitted along with loan application include

Personal document Property document Security document Personal documents:

Salaried class:

Salary certificates or certified copies of salary certificates with deductions for the past 6 months. Form 16 from the employer for the past 3 years. Bank Statements for a period of last six months

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Age proof of the applicants. (Copy of passport /driving license/voter's ID Card /Ration Card) Income proof of the applicants. Self employed/business class:

Property document
Your loan will be disbursed after you identify and select the property or home that you are purchasing and on your submission of the requisite legal documents. While you may be under the impression that the list of documents asked for is rather extensive, please note that it is for your own good. Each and every single document asked for will be verified and checked to ensure your safety. This may take some time but we want to ensure a clear title and will complete all the legal and technical verifications to ensure that you have full rights to your home.

LIC Housing Finance Home Purchase Loan for Resident Indian 1. Griha Prakash

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Loan Amount: Min. Rs. 25,000 - Max.Rs.1,00,00,000. Loan to Property Cost :

85% of total Cost of the property including Stamp Duty and Registration Charges.

Loan Term :
Upto 20 Years or Retirement Age or 70 years of Age, whichever is earliest.

Repayment Mode:
Equated Monthly Installments(EMI) - Monthly Rest Basis

Security :
1. Equitable Mortgage of House/Flat 2. One Guarantor.

Risk Cover :
Any existing or new policy under any acceptable plan of insurance (issued by LIC of India) on the lives of the applicants, having risk cover to the extent of loan amount.

Front End Charges :

1.00% of Loan Sanctioned. 2. Loan for Purchase of Vacant Plots/Sites

Loan Amount : Min Rs.50,000 Max Rs. 20,00,000. Loan to Property Cost :
85% of the Cost of Plot/Site.

Loan Term :
Upto 15 Years or Retirement Age, or 70 years of Age, whichever is earliest.

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Repayment Mode :
By Equated Monthly Installments (EMI) - Monthly Rest Basis.

Security :
1. Equitable Mortgage of Plot/Site 2. One Guarantor.

Risk Cover :
Life Insurance Cover is not required but advisable in the interest of the applicants.

Front End Charges :

1.00% of Loan Sanctioned.

IND BANK HOUSING LTD. Loans to Indian Resident Individuals 1. Quantum of Loan

33

Purchase/Construction Minimum - Rs 7,500/Maximum - Rs 25,00,000/Upgradation/ Major Repairs/ Additional Construction Minimum Rs 7,500/Maximum Rs 5,00,000/2. Margin
15% of the project cost

3. Rate of Interest

In respect of loans for Construction/Purchase

Upto Rs 50,000/- 12.00% Rs 50,001 - 5,00,000/- 13.50% Rs 5,00,001 - 10,00,000/- 14.50% Rs 10,00,001 - 25,00,000/- 15.00%

In respect of loans for Upgradation/ Major Repairs/Additional Construction

Upto Rs 60,000/- 13.50% Rs 60,001 - Rs 3,00,000- 14.00% Rs 3,00,001 - Rs 5,00,000- 14.50%

4. EMI for a loan of Rs.10,000-for 20 years

12.00% - Rs. 112 13.50% - Rs. 123 14.00% - Rs. 126 14.50% - Rs. 130 15.00% - Rs. 134

5. Age of Building (In case of Purchase)

Not exceeding 20 years.

6. Repayment PeriodMinimum : 5 years. Maximum : 20 years.

Subject to the repayment period not extending beyond the retirement in the case of salaried class and beyond 65 years in the case of others.

34

7. Security
Equitable Mortgage of the property / Registered Mortgage wherever necessary and guarantees from 2 suitable persons

8. Other Charges Registration fees - Rs 10/Processing fees:

Upto a loan limit of Rs 5 lacs - 0.75% of the loan applied (non refundable).

Loan limit of above Rs 5 lacs - 1% of the loan applied for. (1/4 th of the fee is
refundable in case of rejection of application).

Administration fees - 1% of loan sanctioned(non refundable). Prepayment charges - NIL Commitment Charges - 1% of the loan if not availed within 3/9 months in case of
purchase/ construction.

9. Insurance
Company will arrange for adequate insurance of the property at the cost of the borrowers.

PNB Housing Finance

35

APNA GHAR YOJANA

We provide housing finance to individuals for construction or for acquisition/ purchase of house/ flat from development authorities such as DDA/HUDA/ PUDA/RHB etc. and also from private builders/groups housing societies. We consider enhancement in loan amount in the event of escalations in cost.

ELIGIBILITY:

Individuals in permanent service or having their own business (Resident or nonresident). Age of the applicant should not be more than 60 years in case of service class and 65 years in case of businessman or self employed;

LOAN AMOUNT:

Minimum loan amount would be Rs.50,000/- and maximum loan amount depends entirely on the repayment capacity of the borrower(s). Actual loan eligibility shall be on the basis of repayment capacity as determined be PNBHFL taking into account income, age, qualification and occupation. Income of borrower(s) / co-borrower(s) shall be clubbed together for calculation of loan eligibility / the level of finance in case of joint application

MARGIN:
The borrower's contribution shall be minimum 20% of the total cost of project, including stamp duty and registration charges.

INTEREST RATES: (Effective from 1.07.2006) PERIOD

1-10 years 11-15 years 16-20 years

Floating Rate of 3-yearly fixed rate Interest(%) of interest(%)

9.00 9.25 9.50 10.50 10.50 10.50

SBI Housing Loan

36

SBI Housing loan schemes are designed to make it simple for you to make a choice at least as far as financing goes! 'SBI-Home Loans'

Unique features:

No cap on maximum loan amount for purchase/ construction of house/ flat Option to club income of your spouse and children to compute eligible loan amount Provision to club expected rent accruals from property proposed to compute eligible loan amount Provision to finance cost of furnishing and consumer durables as part of project cost Repayment permitted upto 70 years of age Free personal accident insurance cover Optional Group Insurance from SBI Life at concessional premium (Upfront premium financed as part of project cost) Interest applied on daily diminishing balance basis 'Plus' schemes which offer attractive packages with concessional interest rates to Govt. Employees, Teachers, Employees in Public Sector Oil Companies. Special scheme to grant loans to finance Earnest Money Deposits to be paid to Urban Development Authority/ Housing Board, etc. in respect of allotment of sites/ house/ flat No Administrative Charges or application fee Prepayment penalty is recovered only if the loan is pre-closed before half of the original tenure (not recovered for bulk payments provided the loan is not closed) Provision for downward refixation of EMI in respect of floating rate borrowers who avail Housing Loans of Rs.5 lacs and above, to avail the benefit of downward revision of interest rate by 1% or more In-principle approval issued to give you flexibility while negotiating purchase of a property Option to avail loan at the place of employment or at the place of construction Attractive packages in respect of loans granted under tie-up with Central/ State Governments/ PSUs/ reputed corporates and tie-up with reputed builders.

Package of exclusive benefits:

Complimentary international ATM-Debit card 37

Complimentary SBI Classic/ International Credit Card with waiver of joining and first year's fees option for E-banking Concessional package under 'Credit Khazana' for prospective car loan borrowers whose accounts are conducted satisfactorily 50% concession in charges in respect of all personal remittances/ collection of outstation cheques

Purpose

Purchase/ Construction of new House/ Flat Purchase of an existing House/ Flat Purchase of a plot of land for construction of House Extension/ repair/ renovation/ alteration of an existing House/ Flat Purchase of Furnishings and Consumer Durables as a part of the project cost Takeover of an existing loan from other Banks/ Housing Finance Companies

Eligibility

Minimum age 18 years as on the date of sanction Steady source of income.

Loan Amount
Applicant/ any one of the applicants are aged over 21 years and upto 45 years - 60 times Net Monthly Income (NMI) or 5 times Net Annual Income (NAI), subject to aggregate repayment obligations not exceeding 57.50% of NMI/ NAI Applicant(s) aged over 45 years of age- 48 times NMI or 4 times NAI, subject to aggregate repayment obligations not exceeding 50%of NMI/ NAI

To enhance loan eligibility you have option to add:

Income of your spouse Income of your son/ daughter living with you, provided they have a steady income and his/ her salary account is maintained with SBI Expected rent accruals (less taxes, cess, etc.) if the house/ flat being purchased is proposed to be rented out Regular income from all sources

Private Institutions

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HDFC Housing Finance

A new home brings with it new hopes, joys and emotions. At HDFC, we have shared new hopes, joys and emotions with over 26 Lakh customers. Every customer has a specific and unique concern. Having earned an experience of 28 years in home loans, Our home loan product is customised to provide you solutions for your unique concern.

Features Maximum loan

85% of the cost of the property (including the cost of the land) and based on the repayment capacity of the customer.

Maximum Term
20 years subject to your retirement age.

Applicant and Co- Applicant to the loan

Home Loans can be applied for either individually or jointly. Proposed owners of the property, will have to be co-applicants. However, the co-applicants need not be coowners.

Adjustable Rate Home Loan

Loan under Adjustable Rate is linked to HDFC's Retail Prime Lending Rate (RPLR). The rate on your loan will be revised every three months from the date of first disbursement, if there is a change in RPLR, the interest rate on your loan may change. However, the EMI on the home loan disbursed will not change*.If the interest rate increases, the interest component in an EMI will increase and the principal component will reduce resulting in an extension of term of the loan, and vice versa when the interest rate decreases.

Purpose
Purchase of

Flat, row house, bungalow from developers Existing freehold properties Properties in an existing or proposed co-operative housing society or apartment owner's association First Power of Attorney purchases in Delhi for DDA flats allotted before 1992. Self Construction

Fees
1% of the loan amount applied plus applicable service taxes and cess.

39

No Charges for
Part or Full Prepayment of loan under Adjustable Rate (except in case of prepayment through a refinance from other bank or institutions prepayment charges will be applicable)

Fixed Rate
Part prepayment upto 25% of opening loan outstanding in a financial year Replacement of cheques Income Tax Certificates Accelerated Repayment Option

Multiple Repayment Option Step up Repayment Facility

Helps young executives take a much bigger loan today based on an increase in their future income, this helps executives buy a bigger home today

Flexible Loan installments Plan

Often customers, parents and their children, wish to purchase properties together. The parent is nearing retirement and their children have just started working. This option helps such customers combine the incomes and take a long term home loan where in the installment reduces upon retirement of the earning parent.

Accelerated Repayment Scheme

Accelerated Repayment Scheme offers you a great opportunity to repay the loan faster by increasing the EMI. Whenever you get an increment, increase in your disposable income or have lumpsum funds for loan prepayment, you can benefit by

Increase in EMI means faster loan repayment saving of interest because of faster loan repayment
You can invest lumpsum funds rather than use it for loan prepayment. The return from the investments also gives you the comfort of paying the increased EMI.

ICICI Home Loan Home Loans

ICICI Bank offers easy home loans for purchase / construction of flat / house. Also you can avail of host of other benefits like:

40

Attractive Interest Rates Simplified Documentation Doorstep Service Get a sanction even without having selected a property free Personal Accident Insurance Insurance options for your Home Loan at attractive premium Office Premises Loans

It is one of the things you have always desired. A place where you have the freedom to achieve your goals and fulfill your dreams - An Office of Your Own. This loan is especially meant for self-employed professionals like Doctors, Architects etc. Choose a loan ranging anywhere between Rs.3 lakh and Rs.1 crore conveniently pay off your loan over a period of upto 15 years

Loan against Property

You can avail of a multipurpose loan against your property. You can avail of Loan against Property for purposes like:

Education Medical Reasons Buying a Car Home Improvement Financing your Business Marriage Expenses Purchase of a new house or office Get loan for upto Rs 3 crore Avail of tenures upto15 years Loans available against residential and commercial properties

Home Improvement Loans

You can get a loan for renovation /refurbishment of your home. Get the same interest rate as applicable on Home Loans Avail of loan upto Rs. 50 Lakhs Avail of loan upto 70% of cost of improvement Enjoy repayment period of upto 15 years

LIC Housing Finance Home Purchase Resident Indian Griha Prakash

41

Loan Amount:

Min. Rs. 25,000 Max.Rs.1,00,00,000.

Loan to Property Cost:

85% of total Cost of the property including Stamp Duty and Registration Charges.

Loan Term:
Upto 20 Years or Retirement Age or 70 years of Age, whichever is earliest.

Repayment Mode:
Equated Monthly Installments(EMI) - Monthly Rest Basis

Security :
1. Equitable Mortgage of House/Flat 2. One Guarantor.

Risk Cover:
Any existing or new policy under any acceptable plan of insurance (issued by LIC of India) on the lives of the applicants, having risk cover to the extent of loan amount. Front End Charges: 1.00% of Loan Sanctioned.

Loan for Purchase of Vacant Plots/Sites Loan Amount: Min Rs.50,000 Max Rs. 20,00,000. Loan to Property Cost: 85% of the Cost of Plot/Site.

Loan Term: Upto 15 Years or Retirement Age, or 70 years of Age, whichever is

earliest.

Repayment Mode: By Equated Monthly Installments (EMI) - Monthly Rest Basis. Security:
42

1. Equitable Mortgage of Plot/Site 2. One Guarantor.

Risk Cover: Life Insurance Cover is not required but advisable in the interest of the
applicants.

Front End Charges: 1.00% of Loan Sanctioned.

HUDCO NIWAS INDIVIDUAL HOUSING FINANCE SCHEME Property:

Housing Urban Development Corporation (HUDCO) offers Niwas scheme. The scheme is a housing finance instrument for individual families which offers loan assistance to individuals constructing or buying a house or a flat. Similar loan assistance is also extended to extend or improve an existing house or flat.

Amount:
The maximum loan amount will not exceed 85 per cent of the total cost of the housing unit, including incidental costs like stamp duty and registration. The maximum loan amount granted by HUDCO is Rs 15 lakh.

Eligibility:
For eligibility, the applicant must be in service, or should be engaged in any profession or business with a regular income for servicing the loan. Applicants have to submit an application form along with supporting documents. An important condition for sanction of the loan is that the proposed owners of the housing unit, for which a loan is being sought, will have to be co-applicants. However, it is not necessary that all co-applicants need be co-owners of the property. Also, the actual sanction of the loan depends on the repayment capacity of the borrower. Factors such as income, age, qualifications, number of dependants, income

Of the spouse, asset and liability of the persons, continuity of occupation and saving history are considered while arriving at the repayment capacity.

Application:
Loan applications can be submitted in any HUDCO Niwas office in the prescribed form along with supporting documents. Contact HUDCO at:

43

HUDCO Niwas Office HUDCO House Lodhi Road New Delhi - 110 003 URL: www.hudco.org Email: niwas.hudco@axcess.net.in

Fees:
A processing fee (non-refundable) of 0.5% of the loan amount applied for i.e. Rs 5 per Rs 1000 of the loan amount applied for is payable, subject to a minimum of Rs 250, at the time of submission of the application form to HUDCO Niwas. On sanction of a loan, the loan offer is made to the applicant. On acceptance, a one-time administrative fee of 1per cent of the loan amount sanctioned is payable. In case the applicant is handicapped or a widow, the processing fees will be 0.4 per cent of the loan amount applied for, and the administrative fee will be 0.8 per cent of the loan amount sanctioned.

Payment Term:
It is normally up to 15 years, but the period will not extend beyond the age of 65 years of applicant. However, HUDCO Niwas will endeavour to determine the repayment period to suit the convenience of the applicant. In case the applicant wishes to extend the period of repayment beyond 15 years, it can be extended up to 20 years. However, in such cases, additional interest of 1 per cent per annum will be charged over and above the regular rates.

EMI:
Loan will be repayable in Equated Monthly Installments (EMI) comprising principal and interest. The interest is calculated on the monthly reducing balance method. The monthly installment depends on the quantum of loan, interest rate applicable and the term of repayment.

GE Money Home Loan

Shift to your dream home today still living in a rented apartment? Is owning your own home still a distant dream?

44

Not any more! GE Money says Yes! to making it possible for you. GE Money Housing Finance offers you complete solutions for all your housing related needs. Apply for a GE Money Home Loan today. Avail of unmatched advantages.

Home Loans ranging from Rs. 5 Lakhs to Rs. 1 Crore Attractive interest rates Up to 85% of property value as loan Loans for ready to move-in residential properties Longer tenor of up to 20 years Attractive offers on Loan Transfer from other banks Insurance Cover on your Home Loan Income Tax benefits Simple documentation and doorstep service

A few documents and you are ready to move in

Only GE Money offers you flexibility and options in terms of Home Loan documentation required. Apply for a GE Money Home Loan today. Just a few documents and you are ready to move-in.

Identity Proof Signature Verification Residence Proof As Income Proof

Sundaram Finance Group Availing Home Loans in India you could

construct a house on your plot of land purchase an apartment from a builder purchase a bungalow/apartment on a second hand basis 45

purchase your home from a Statutory Authority

Maximum loan:
Rs.1 crore or 85% of the agreement value, whichever is less, subject to repayment capacity as assessed by SHFL.

Maximum term of loan: Salaried Category:

20 years or retirement age, whichever is earlier for all salaried categories of customers.

For Self-employed:
15 years or 65 years, whichever is earlier.

HDFC BANK

46

HDFC Bank Ltd.

Type Founded Public (BSE: 500180, NYSE: HDB) 1994 Banking Insurance Capital Markets and allied industries Financial services www.hdfcbank.com

Headquarters Mumbai, India Industry Products Website

About Us

Introduction
47

HDFC Bank Ltd is a commercial bank of India, incorporated in August 1994, after the Reserve Bank of India allowed establishing private sector banks. The Bank was promoted by the Housing Development Finance Corporation, a premier housing finance company (set up in 1977) of India. HDFC Bank has 1,412 branches and over 3,295 ATMs, in 528 cities in India, and all branches of the bank are linked on an online realtime basis. As of September 30, 2008 the bank had total assets of INR 1006.82 billion. For the fiscal year 2008-09, the bank has reported net profit of Rs.2,244.9 crore, up 41% from the previous fiscal. Total annual earnings of the bank increased by 58% reaching at Rs.19,622.8 crore in 2008-09. Helping Indians experience the joy of home ownership. The road to success is a tough and challenging journey in the dark where only obstacles light the path. However, success on a terrain like this is not without a solution. As we found out nearly three decades ago, in 1977, the solution for success is customer satisfaction. All you need is the courage to innovate, the skill to understand your clientele and the desire to give them your best. Today, nearly three million satisfied customers whose dream we helped realise, stand testimony to our success. Our objective, from the beginning, has been to enhance residential housing stock and promote home ownership. Now, our offerings range from hassle-free home loans and deposit products, to property related services and a training facility. We also offer specialised financial services to our customer base through partnerships with some of the best financial institutions worldwide.

Background
At the request of AID and RHUDO/Asia, The Urban Institute evaluated the Housing Guaranty Program (HG-002) with the Housing Development Finance Corp., Ltd. (HDFC) in October 1989. The goal of the Housing Guaranty (HG) program in India was the establishment of a market-oriented housing finance system.

History
In 2008 HDFC Bank acquired Centurion Bank of Punjab taking its total branches to more than 1,000. Though, the official license was given to Centurion Bank of Punjab branches, to continue working as HDFC Bank branches, on May 23, 2008.

HDFC Founder
MAN WITH A MISSION

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An extract from the book 'A Tribute' If ever there was a man with a mission it was Hasmukhbhai Parekh, our Founder and Chairman-Emeritus, who left this earthly abode on November 18, 1994. Born in a traditional banking family in Surat, Gujarat, Mr. Parekh started his financial career at Harkisandass Lukhmidass - a leading stock broking firm. The firm closed down in the late seventies, but, long before that, he went on to become a towering figure on the Indian financial scene. In 1956 he began his lifelong financial affair with the economic world, as General Manager of the newly-formed Industrial Credit and Investment Corporation of India (ICICI). He rose to become Chairman and continued so till his retirement in 1972. At the ripe age of 60, Hasmukhbhai started his second dynamic life, even more illustrious than his first. His vision for mortgage finance for housing, gave birth to the Housing Development Finance Corporation - it was a trend-setter for housing finance in the whole Asian continent. He was a true development banker. His building up HDFC without any government assistance, is itself a brilliant chapter in financial history. His wisdom and warmth drew people from all walks of life to him, for advice, guidance and inspiration. A soft spoken man of few words, Mr. Parekh nevertheless held strong and definite views with a quiet conviction. He was always concerned with building bridges, improving and encouraging communication between people. He was also a writer in his own right. There are over 200 published articles by him, full of incisive comments on finance and economics. In 1953 he brought out a volume called: The Bombay Money Market. It detailed the intricate working of the Indian money market. His works in Gujarati - Hirane Patro, Hirane

Vadhu Patro - occupy pride of place in Gujarati literature. In 1992, the Government of India honoured him with the Padma Bhushan Award. The London School of Economics & Political Science conferred on him an Honorary Fellowship.

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But there was much more to the man than his financial genius. In his own unassuming way, Hasmukhbhai devoted all his life to raising resources for philanthropic causes. He was one of the Founder Members of the Centre for Advancement of Philanthropy, and its Chairman till 1993. He took active interest in the Bombay Community Public Trust, designed specifically to serve the needs of the city's underprivileged citizens. When Mr. Deepak Parekh took over as Chairman from Hasmukhbhai, he said: "Taking over from H.T. Parekh is a formidable task; his vision. brought about not only an institution, but an entire concept which has proved itself to be of lasting importance." In his last years, developments in the financial sector brought him some measure of satisfaction. Says ICICI Chairman, N. Vaghul: "The most gratifying aspect about his life is that values he cherished all his life came into reality in the last years. Opening up the financial sector, and deregulation of lending rates were issues he stood for all his life and this happened before he passed away." Farewell dear Hasmukhbhai! All of us will miss not only H.T. Parekh the financial wizard, but much more so, the man. The only and best tribute we can pay to such an individual is to try and follow in his footsteps, keeping in mind his high ideals and philanthropic outlook. As Henry W. Longfellow said: Lives of great men all remind us We can make our life sublime, And, departing leave behind us Footprints on the sands of time.

Objectives & Background Housing Finance Sector

Against the milieu of rapid urbanisation and a changing socio-economic scenario, the demand for housing has grown explosively. The importance of the housing sector in the economy can be illustrated by a few key statistics. According to the National Building Organisation (NBO), the total demand for housing is estimated at 2 million units per year and the total housing shortfall is estimated to be 19.4 million units, of which 12.76 million units is from rural areas and 6.64 million units from urban areas. The housing industry is the second largest employment generator in the country. It is estimated that the budgeted 2 million units would lead to the creation of an additional 10 million manyears of direct employment and another 15 million man-years of indirect employment.

Having identified housing as a priority area in the Ninth Five Year Plan (1997-2002), the National Housing Policy has envisaged an investment target of Rs. 1,500 billion for this sector. In order to achieve this investment target, the Government needs to make low cost funds easily available and enforce legal and regulatory reforms.

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Background
HDFC was incorporated in 1977 with the primary objective of meeting a social need that of promoting home ownership by providing long-term finance to households for their housing needs. HDFC was promoted with an initial share capital of Rs. 100 million.

Business Objectives
The primary objective of HDFC is to enhance residential housing stock in the country through the provision of housing finance in a systematic and professional manner, and to promote home ownership. Another objective is to increase the flow of resources to the housing sector by integrating the housing finance sector with the overall domestic financial markets...

Organisational Goals
HDFC's main goals are to a) Develop close relationships with individual households b) Maintain its position as the premier housing finance institution in the country c) Transform ideas into viable and creative solutions d) Provide consistently high returns to shareholders e) To grow through diversification by leveraging off the existing client base.

Organisation & Management

HDFC is a professionally managed organisation with a board of directors consisting of eminent persons who represent various fields including finance, taxation, construction and urban policy & development. The board primarily focuses on strategy formulation, policy and control, designed to deliver increasing value to shareholders.

Board of Directors
Details of the Board of Directors in terms of their directorships/memberships in committees of public companies (excluding HDFC) as on August 31, 2009 are as under: Sr. Name of Director Category 51 No. of No. of Committee

No. 1 Mr. Deepak S. Parekh 2 Mr. Keshub Mahindra 3 Mr. Shirish B. Patel 4 Mr. B. S. Mehta 5 Mr. D. M. Sukthankar 6 Mr. D. N. Ghosh 7 Dr. S. A. Dave 8 Dr. Ram S. Tarneja 9 Mr. N. M. Munjee 10 Dr. Bimal Jalan 11 Dr. J. J. Irani 12 Mr. D. M. Satwalekar 13 Ms. Renu Sud Karnad Executive Chairman Independent Independent Independent Independent Independent Independent Independent Independent Independent Nonexecutive Independent+ Joint Managing Director Vice Chairman & Managing Director

Directorship 11 5 1 14 4 4 11 11 14 0 9 5 12

Member 7 1 0 9 1 1 7 6 9 0 2 2 5

Chairperson 5 1 0 5 1 1 0 1 4 0 0 2 2

14 Mr. K. M. Mistry

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HDFC has a staff strength of 1445 (as on 31st March, 2008), which includes professionals from the fields of finance, law, accountancy, engineering and marketing.

Centre For Housing Finance(CHF)

A synonym for convenient and hassle-free service, HDFC's Training Centre, CHF presents a unique focal point to hold training programmes.

Nature at its best...

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CHF is located in the serene ambience of Lonavla, 2000 feet above sea level, 120 kms. from Mumbai. The hills and valleys and scenic landscape make your training a unique pleasurable experience, so much so you may even prefer having your sessions out in the open lush green lawns.

Training & Human Resource Management...

HDFC, having pioneered and helped develop market-oriented housing finance in India, has continued to expand its services to a broader spectrum of clients by offering specialised training courses. HDFCs Centre for Housing Finance (CHF) provides technical assistance to national governments and housing finance institutions in developing countries in the South Asian and African regions, especially in the field of institutional development for effective shelter finance delivery. The second major area of activity of the CHF is managerial training for housing finance institutions. Besides effective housing finance operations, some established housing finance institutions also seek training for systems development and improvement.

Technology adds value...

State-of-the-art technology at this Training Centre makes your training programmes come alive. Overhead Projectors with remote control screen, multimedia projector, electronic copy board & programmable lighting arrangements all make for a great learning experience. Besides, you can bid farewell to the hiss, crackle and static of artificial audio sounds. And welcome sound in its natural state thanks to the acoustic cushioning of the Training Centre. CHF is also well-equipped with computers, fax and photocopying facilities. A back-up generator set provides uninterrupted power supply. Air conditioning systems ensure a balanced climate here. Also our Syndicate rooms provide facilities for group work.

Service that makes you smile

CHF Offering you service when you need it the most. Ergonomically designed chairs, with seating arrangements which are flexible to suit your requirements and refreshment services at preferred timings make the experience complete and fulfilling in every respect. A well-equipped Library, and above all, a caring and experienced staff who understand your needs are what make CHF truly one of a kind. When you come to

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CHF, rest assured that the only thing you would need to think about is your training. We'll take care of the rest.

The Residential Annexe

The Residential Annexe has seventeen well appointed rooms (individual balconies) for single or double occupancy. Equipped with comforts like Cable T.V., Air Conditioning, attached bathrooms and work space, these rooms make unwinding a rewarding experience. Attached to The Residential Annexe, is the air-conditioned Dining Room offering Chinese, Continental, Mughlai and South Indian cuisines.

The Lounge
Detached from the Residential Annexe is the Lounge, situated in the most scenic surroundings. Evenings here add that touch of excitement with barbecues. An occasion to let your hair down.

Be a sport
With over 6 acres of landscaped terrain, you could choose to go jogging, play basketball, tennis, table tennis or simply take a long leisurely stroll through this magical locale.

The Customer's Voice

We at CHF believe that the final word is always that of the customer. Summing up what you can expect from CHF are the words of Mr. R. Sridhar (Managing Partner, Ogilvy Consulting), who facilitated a workshop at CHF, "I was with a team of 15 people at CHF. As we entered, I could see at the gate that we were expected as we entered the Reception Area the facility-in-charge personally welcomed us. The facility was wonderful Everyone had a wonderful experience with the service. This is an excellent example of 'being there when they need you the most'. The reason is simple. He (the facility-in-charge) anticipated every need and fulfilled them before they arose."

Experience Counts
Having conducted and organised several in-house and international workshops at CHF, we understand what it takes to organise a successful training programme. What's more, we have an ever-lengthening list of reputed corporate clients including

ANZ Grindlays, Bajaj Electricals Ltd. BASF India Ltd., Castrol India Ltd., ColgatePalmolive India Ltd., Crompton Greaves India Ltd., HSBC Bank, Kirloskar Oil Engines, Kotak Mahindra Finance Ltd., Otis Elevators, PepsiCo Holdings, Philips India Ltd., Stock Holding Corporation of India Ltd., Telco Ltd., Wartsila NSD India Ltd., etc. All of whom have held training programmes at CHF and returned enriched and fulfilled.

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Over the years, delegates from several countries including Malaysia, Ghana, Mauritius, Fiji Islands, Thailand, China, Sri Lanka, Bangladesh, Nepal, Indonesia, Mongolia, Tanzania, Sultanate of Oman, Pakistan and Philippines have participated in training programmes held at the Centre and benefited greatly.

Service at your doorstep

Once you've decided on making your learning experience a memory to cherish forever, just speak to us. And then, sit back and relax. We at CHF will take care of al your ticketing and sight-seeing arrangements. What's more, as soon as you reach Lonavla, your transport to and from the Centre is arranged for. Then you have the whole training centre to yourself for the entire period of your training. And coming from HDFC, India's premier housing finance institution, you couldn't expect anything short of the best. For us at CHF you matter. "So, give us a call today and get set for a truly enriching experience!"

HDFC Consulting Services

HDFC is a unique example of a housing finance company which has demonstrated the viability of market-oriented housing finance in a developing country. It is viewed as an innovative institution and a market leader in the housing finance sector in India. The World Bank considers HDFC a model private sector housing finance company in developing countries and a provider of technical assistance for new and existing institutions, in India and abroad. HDFCs executives have undertaken consultancy assignments related to housing finance and urban development on behalf of multilateral agencies all over the world. HDFC has also served as consultant to international agencies such as World Bank, United States Agency for International Development (USAID), Asian Development Bank, United Nations Center for Human Settlements, Commonwealth Development Corporation (CDC) and United Nations Development Programme (UNDP). HDFC has also undertaken assignments for the United Nations Capital Development Fund in Ethiopia, for the UNCHS in Nairobi, for USAID in Russia and Bulgaria, and projects of the World Bank in Indonesia and Ghana. At the national level, HDFC executives have played a key role in formulating national housing policies and strategies. Recognising HDFCs expertise, the Government of India has invited HDFCs executives to join a number of committees and task forces related to housing finance, urban development and capital markets.

Social Initiatives
Built on the principal values of fairness, kindness, efficiency and effectiveness, HDFC, from its very inception has injected social awareness and good governance into its core business practices. In terms of its social commitment, HDFCs approach has been to make a positive impact on economic and human development while improving the

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quality of life of our surrounding communities. These activities largely constitute an extension of HDFCs central business encompassing varied social sectors.

MILESTONE 30 YEARS 1977

HDFC is incoporated on October 17 The brick that launched a Million Homes This is the actual brick used for HDFC's first brochure in 1978 and symbolises a part of the romance of creating a visual identity of a new institution.

1978

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First Housing Loan The first Housing Loan disbursed to Mr. D. B. Remedios at Bombay First Public Issue of Equity Shares The first Public Issue of Equity Shares of Rs. 10 crores

1980
[IFC(W)] International Finance Corporation [IFC(W)] under its Investment Agreement with HDFC disburses the first instalment of US$ 1 million from a Line of Credit of US$ 4 million

1981

First retail Deposit Product HDFC introduces its first retail Deposit Product. Wholly-owned subsidiary, HDFC promotes a wholly-owned subsidiary, HDFC Developers Negotiates a guarantee of US$ 30 million HDFC

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negotiates a guarantee of US$ 30 million from United States Agency for International Development (USAID) under its Housing Guaranty Program .The first computer is installed at Head Office.

1982
Line of Credit Product (LOC) HDFC introduces the Line of Credit Product (LOC) for employee owned housing.

1983

The Aga Khan visits HDFC His Royal Highness, The Aga Khan visits HDFC Implementation agreement of Phase II Signing of the implementation agreement of Phase II of the USAID programme

1984
Loan approvals Annual loan approvals cross Rs. 100 crores

1985
'Bausparkassen' model The Home Savings Plan based on the 'Bausparkassen' model, West Germany and the 'Step-up Repayment Facility' (SURF) are introduced

1986

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USAID Housing Program Agreement Our founder Chairman, Mr. H. T. Parekh and Mr. John Gunther Dean, the then US ambassador to India, signs the USAID Housing Program Agreement for the third and final tranche of US$ 15 million out of the US$ 60 million approvals cover 1,000 towns HDFC loan approvals cover 1,000 towns.

1987
First Equity Rights HDFC's first Equity Rights Issue.

1988

Times Shield HDFC Cricket team wins Times Shield - G Division Shelter Assistance Reserve The Shelter Assistance Reserve is set up with an initial contribution of Rs. 50 lacs US$ 250 million loan to HDFC World Bank approves US$ 250 million loan to

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HDFC Cumulative loan approvals HDFC's cumulative loan approvals cross Rs. 1,000 crores Telescopic Loan Plan HDFC introduces Telescopic Loan Plan and Short Term Bridging Loan products. Partnership with India's leading financial institutions HDFC in partnership with India's leading financial institutions and commercial banks promotes: Gujarat Rural Housing Finance Corporation Limited (GRUH Finance), Housing Promotion and Finance Corporation Limited (now SBI Home Finance), Can Fin Homes Limited and Infrastructure Leasing and Financial Services (IL&FS), and the Credit Rating Information Services of India Ltd. (CRISIL).

1989

(LPS)- On-line Loan Processing System (LPS) is now on-line Home Improvement loans & Home Extension loans HDFC introduces two new products viz. Home Improvement loans & Home Extension loans Line of Credit of DM 25 million HDFC avails a Line of Credit of DM 25 million from KfW, a German development bank for low cost housing projects. HDFC's Training Centre HDFC's Training Centre, Centre for Housing Finance (CHF) is established Approves loans for over 1 lac units HDFC approves loans for over 1 lac units in a single year First international training programme CHF conducts its first international training programme on housing finance management and managerial effectiveness

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1990

United Nations Scroll of Honour HDFC is awarded the United Nations Scroll of Honour for "Innovations in Public-Private Partner ships to mobilise household savings and to expand access to families to market oriented housing finance and services" Jointly with the United Nations Centre HDFC, jointly with the United Nations Centre for Human Settlements (UNCHS) promotes the Coalition of Housing Finance Institutions in Asia. Other partner members are the Home Development Mutual Fund, Philippines, the Government Housing Bank, Thailand and the Korea Research Institute for Human Settlements

1991
Relaunches Retail Fixed Deposit products HDFC relaunches its retail fixed deposit products

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1992

Mr. H.T. PAREKH, Padma Bhushan Mr. H.T. PAREKH is conferred the Padma Bhushan by the Government of India Approval loan of 25 million Commonwealth Development Corporation (CDC) approves a loan of 25 million

1993
Chairman's Chair Mr. Deepak S. Parekh takes over as Chairman from Mr. H.T. Parekh Joing venture with GE Capital A joint venture with General Electric Capital Corporation (GE Capital) of US to promote Countrywide Consumer Financial Services Ltd. for consumer finance. Undertaking a comprehensive rehabilitation project HDFC responds promptly to the earthquake that struck the people of Latur, Maharashtra by undertaking a comprehensive rehabilitation project for 339 families First Overseas Training Programme CHF conducts its first Overseas Training Programme on Credit Appraisal and Loan Recovery Techniques at Manila, Philippines

1994

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First private placement of Equity Shares HDFC's first private placement of Equity Shares for Rs. 261 crores with domestic institutions Introduces Non-Residential Premises Loans HDFC introduces Non-Residential Premises Loans for Individuals

1995

Strategic alliance with NatWest Markets (UK) HDFC in strategic alliance with NatWest Markets (UK) promotes the HDFC Bank which was inaugrated by Dr. Manmohan Singh, the Union Finance Minister. Joint venture with IL&FS A joint venture with IL&FS and Colliers Jardine Asia Pacific Limited to promote Colliers Jardine India Property Services Limited 'AAA' Status Both ICRA & CRISIL awarded HDFC deposits 'AAA' status reflecting the highest standards of safety by their award of 'MAAA' & 'FAAA' respectively

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MOU agreement with Standard Life Assurance Co. of UK HDFC signs MOU agreement with Standard Life Assurance Co. of UK for life insurance First private placement of Equity Shares HDFC's first private placement of Equity Shares with foreign investors - Rs. 428.74 crores India's Best Managed Company HDFC declared India's Best Managed Company by Asiamoney Magazine

1996

'Best Managed Company' HDFC declared 'Best Managed Company' for the second year running this time jointly with Infosys Technology by Asiamoney Magazine First international office HDFC opens its first international office at Dubai, UAE

1997

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Corporate Profile on a CD-ROM HDFC Annual report is produced with a Corporate Profile on a CD-ROM. Equity shares, de-materialised HDFC, the first company in India whose equity shares were de-materialised Ten best case study for bench-marking Eicher consultancy selects HDFC as one of the ten best case study for bench-marking Asian Development Bank (ADB) loan HDFC gets an Asian Development Bank (ADB) loan of US$ 100 million Promotes Delta Brac Housing Finance Corporation Limited HDFC promotes Delta Brac Housing Finance Corporation Limited, the first private sector housing finance company in Bangladesh

1998
"Best Managed company in India" HDFC voted as the "Best Managed company in India" in a survey of 250 fund managers, world wide conducted by Asiamoney Partnership with a South-based NGO HDFC in partnership with a South-based NGO launches the Indian Association for Savings & Credit (IASC) - a pioneering microfinance institution operating in the states of Tamil Nadu and Kerala Introduce: Home Equity Loans to corporate HDFC introduces Home Equity Loans and Corporate Employees Group Finance Arrangement (CEFA)

1999
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IMC Ramkrishna Bajaj National Trophy HDFC receives the IMC Ramkrishna Bajaj National Trophy for Business Excellence - the first company to receive this award in the Services category Investments HDFC invests in a new Housing Finance company in Sri Lanka . www.hdfcindia.com launched HDFC website www.hdfcindia.com launched (now hdfc.com) Introduction: Adjustable Rate Home Loans HDFC the first housing finance institution to introduce the Adjustable Rate Home Loans

2000

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Inaugurates the new HDFC STANDARD LIFE Office in Mumbai HDFC Standard Life Insurance Company Limited becomes the first private insurer in India to obtain registration from the Insurance Regulatory and Development Authority (IRDA). Shri Yashwant Sinha, Union minister for finance, inaugurates the new HDFC STANDARD LIFE Office in Mumbai First Property Fair HDFC launches its first Property Fair Joint venture with Mahindra & Mahindra group A joint venture with Mahindra & Mahindra group to promote propertymartindia.com, a website to provide a range of real estate services (renamed as HDFC Realty.com) First Mortgage Backed Securities HDFC issues its first Mortgage Backed Securities.

2001

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Promotes Credit Information Bureau (India) Ltd. (CIBIL) HDFC, State Bank of India, Dun & Bradstreet and Trans Union International Inc. (TU) promotes Credit Information Bureau (India) Ltd. (CIBIL) Figures in the Top 20 HDFC figures in the Top 20 - The Champions of Asian Business - A poll by Asiamoney of Asia's Best Companies in the Asia Pacific Region Among the Top 10 Asia's Best Managed Companies HDFC features among the Top 10 Asia's Best Managed Companies in the category of Banking and Finance Euro money magazine

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Listed on the New York stock exchange HDFC Bank's American Depository Shares (ADS) are listed on the New York stock exchange. 100th office HDFC's 100th office opens at Amritsar Syndicated Foreign Currency Loan HDFC raises its first ever syndicated foreign currency loan of JPY 12 billion

2002

Joint venture with Chubb Corporation, USA A joint venture with Chubb Corporation, USA to promote HDFC-Chubb General Insurance Company Ltd. for non-life insurance Offer A group offer from HDFC for the benefit of its customers Crosses Rs. 50,000 crores HDFC Group's Asset base crosses Rs. 50,000 crores

2003

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Lifetime Achievement award Our Chairman, Mr Deepak Parekh was conferred the Lifetime Achievement award by the Economic Times.

ICSI award for Excellence HDFC was awarded the ICSI award for Excellence in Corporate Governance for the year 2003.

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Loan Agreement for US $200 million HDFC signed a loan agreement for US $200 million with International Finance Corporation (IFC), Washington

2004

Economic Times Lifetime Achievement award The Economic Times Lifetime Achievement award for HDFC Chairman, Mr. Deepak Parekh. US $ 200 million loan agreement HDFC signs US $ 200 million loan agreement with International Finance Corporation (IFC), Washington.

2005

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Economic Times Corporate Citizen of the year award HDFC wins the Economic Times Corporate Citizen of the year award for its longstanding commitment to community development.

'Tiger Claws' wins the Gold Midas Award HDFC Environment ad titled 'Tiger Claws' wins the Gold Midas Award at the New York Festival.

BPO Contract HDFC and Barclays sign long term BPO Contract. Barclays now holds 50% stake in Intelenet, the balance 50% resides with HDFC.

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Ranked the 5th HDFC ranked the 5th Best Company to work for in India - Business Today

2006

Rs. 1,00,000 Crore Home Loan Approvals HDFC Crosses Rs. 1,00,000 Crore in Home Loan Approvals

Padma Bhushan Padma Bhushan for HDFC Chairman Deepak Parekh

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The ICAI Award Ms. Renu Sud Karnad, Executive Director, HDFC receiving the ICAI Award from Mr. P C Gupta, Hon'ble Union Minister of State for Company Law Affairs 'The Best Presented Accounts' ICAI confers gold shield to HDFC for 'The Best Presented Accounts' Corporate Governance Approach Institute of International Finance hails HDFC's Corporate Governance approach WL ROSS and HDFC WL Ross and HDFC Team-up to Invest in Indian Corporate Turnarounds.

2007

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Signing of joint venture by HDFC Ltd and ERGO on general insurance Mr Deepak Parekh - Chairman, HDFC Ltd. with Dr.Nikolaus von Bomhard - CEO, Munich Re Group

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A noteworthy recognition Finance Asia, one of the prestigious international magazines, has recognized our Chairman, Mr Deepak Parekh, for his lifetime achievements. He was felicitated at their Achievement Awards function held in Hong Kong on January 24, 2008. The Achievement Awards, which is a landmark event, was attended by over 300 senior executives from all the major international investment banks across Asia.

HDFC Future
HDFC has always been market-oriented and dynamic with respect to resource mobilisation as well as its lending programme. This renders it more than capable to meet the new challenges that have emerged. Over the years, HDFC has developed a vast client base of borrowers, depositors, shareholders and agents, and it hopes to capitalise on this loyal and satisfied client base for future growth. Internal systems have been developed to be robust and agile, to take into account changes in the volatile external environment. HDFC has developed a network of institutions through partnerships with some of the best institutions in the world, for providing specialised financial services. Each institution is being fine-tuned for a specific market, while offering the entire HDFC customer base the highest standards of quality in product design, facilities and service.

Careers at HDFC
HDFC's finest investment is in its Human Resources. It draws its personnel from many disciplines. They are the building blocks on which the company's performance & productivity is based".

H T Parekh, Founder-Chairman
Our most valuable assets are our Human Resources and it is our constant endeavour to continuously develop them by laying strong emphasis on their Training & Development. We focus on our employees' career development so that their aspirations can meet our goals. We are truly proud that today we have a highly motivated team of professionals and that we have the lowest employee turnover rate in the Industry. Since our inception in 1977 we have maintained our position as the premier Housing Finance Institution in the country. Our consistently high growth rate over the past 30 years has provided challenging career opportunities for young professionals .many of whom have grown to become functional heads, regional managers, branch managers and service center heads.

Organizational Culture & Values:

We have an open and informal culture. We value integrity, commitment, teamwork and excellence in customer service. We adopt a policy of "Learning By Doing" which encourages decision making as well as learning from doing. As we continue to grow rapidly inspite of the competitive market scenario, young professionals opting to make a career with HDFC today will find more challenging and exciting opportunities to contribute and grow with us.

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HDFC Home Loan Advantage Home Loan Counselling - Sharing of over 30 years of home loan experience
We have been a part of a 30 year journey with our 33 Lakh customers. Our home loan counsellors offer you the time tested advice. Be it legal documentation, project or builder approvals, and technical advice, we look forward to sharing with you and this service is absolutely free. Our project approval facility provides our customers the comfort of purchasing properties from builders who have complied with all basic documentation.

Door Step Service

We offer door step service. Please call HDFC Home Line call for our Sales Executive to assist you or get in touch with the HDFC Office near you,

We help you find your dream home

You can buy, sell, lease residential or commercial properties through HDFC Realty.

Wide Product Range

We provide loans to meet all your requirements for you to make that house a home.

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 Loan. Loans on Adjustable Rate, Fixed Rate.

Multiple Repayment Option

Step Up Repayment Facility

Helps young executives take a much bigger loan today based on an increase in their future income, this helps executives buy a bigger home today!

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Flexible Loan installments Plan

Often customers, parents and their children, wish to purchase properties together. The parent is nearing retirement and their children have just started working. This option helps such customers combine the incomes and take a long term home loan where in the installment reduces upon retirement of the earning parent.

Tranche Based EMI

Customers purchasing an under construction property need to pay interest ( on the loan amount drawn based on level of construction) till the property is ready. To help customer save this interest, we have introduced a special facility of tranche Based EMI. Customers can fix the installments they wish to pay till the property is ready. The minimum amount payable is the interest on the loan amount drawn. Anything over and above the interest paid by the customer goes towards Principal repayment. The customer benefits by starting EMI and hence repays the loan faster.

Accelerated Repayment Scheme

Accelerated Repayment Scheme offers you a great oppourtunity to repay the loan faster by increasing the EMI. Whenever you get an increment, increase in your disposable income or have lump sum funds for loan prepayment, you can benefit by:

Increase in EMI means faster loan repayment Saving of interest because of faster loan repayment

You can invest lump sum funds rather than use it for loan prepayment. The return from the investments also gives you the comfort of paying the increased EMI..

Wide network of financing

With over 200 offices, 90 outreach programs - HDFC is able to provide home loans in over 2400 locations in India. You can apply at your local HDFC office for properties in locations where we finance.

Post Disbursement Services

Income tax Certificate to enable you to claim the tax benefits are sent to you. This service is absolutely free.

Loan Repayment

ECS facility Post dated cheques - No charges for replacement of cheques

Loan repayment at any HDFC offices.

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HDFC HOME LOAN

A new home brings with it new hopes, joys and emotions. At HDFC, we have shared new hopes, joys and emotions with over 32 Lakh customers. Every customer has a specific and unique concern. Having earned an experience of 30 years in home loans, Our home loan product is customised to provide you solutions for your unique concern.

Features

Maximum loan
85% of the cost of the property (including the cost of the land) and based on the repayment capacity of the customer.

Maximum Term
20 years subject to your retirement age.

Applicant and Co- Applicant to the loan

Home Loans can be applied for either individually or jointly. Proposed owners of the property will have to be co-applicants. However, the co-applicants need not be co owners.

Adjustable Rate Home Loan

Loan under Adjustable Rate is linked to HDFC's Retail Prime Lending Rate (RPLR). The rate on your loan will be revised every three months from the date of first disbursement, if there is a change in RPLR, the interest rate on your loan may change. However, the EMI on the home loan disbursed will not change*. If the interest rate increases, the interest component in an EMI will increase and the principal component will reduce resulting in an extension of term of the loan, and vice versa when the interest rate decreases. Conditions Apply

Fixed Rate

Purpose

Purchase of
o o o o

Flat, row house, bungalow from developers Existing freehold properties Properties in an existing or proposed co-operative housing society or apartment owner's association First Power of Attorney purchases in Delhi for DDA flats allotted before 1992.

Self Construction

Interest Rate

Please call HDFC Home Line in your city for the latest interest rate.

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Fees
1% of the loan amount applied plus applicable service taxes and cess.

No Charges for

Replacement of cheques Income Tax Certificates Accelerated Repayment Option

Redemption Charges Adjustable Rate Home Loan [ARHL]

If a prepayment is made within 3 years of the first disbursement*, under Adjustable Rate Home Loan (ARHL) option early redemption charges of 2% of the amount being prepaid is payable if the amount being repaid is more than 25% of the opening balance.

Fixed Rate Home Loan [FRHL]

Redemption charges of 2% of the amount being prepaid is payable if the amount being repaid is more than 25% of the opening balance In case of commercial refinance under both the FRHL and ARHL an early redemption charge of 2% is payable. You may be required to submit copies of your Bank Statements or any other documents that HDFC deems necessary to verify the source of prepayment.

How to Apply
It's simple! You can choose any of the following ways to get in touch with us!

Call the HDFC Home Line in your city - Our sales representatives
will reach out to you for assistance

HDFC Office Locator

We have over 200 offices with flexible timings keeping in mind your work timings. The offices are conveniently located at a place closer to you.

SMS HDFCHOME to 56767

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Documents
You can download the Application Form and submit along with the following documents for an approval of loan.

Salaried Customers
Application form with photograph Identity and Residence Proof Latest Salary-slip Form 16 Last 6 months bank statements

Self Employed Professionals

Application form with photograph Identity and Residence Proof

Self Employed Businessman

Application form with photograph Identity and Residence Proof

Education Qualifications Education Qualifications Certificate and Proof of business Certificate and Proof of business existence existence Last 3 years Income Tax returns (self and business) Last 3 years Profit /Loss and Balance Sheet Last 6 months bank statements Processing fee cheque Business profile Last 3 years Income Tax returns (self and business) Last 3 years Profit /Loss and Balance Sheet Last 6 months bank statements (self and business) Processing fee cheque

Processing fee cheque

Repayment Options

Step Up Repayment Facility

Helps young executives take a much bigger loan today based on an increase in their future income, this helps executives buy a bigger home today!

Flexible Loan installments Plan

Often customers, parents and their children, wish to purchase properties together. The parent is nearing retirement and their children have just started working. This option helps such customers combine the incomes and take a long term home loan where in the installment reduces upon retirement of the earning parent .

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Tranche Based EMI

Customers purchasing an under construction property need to pay interest ( on the loan amount drawn based on level of construction) till the property is ready. To help customer save this interest, we have introduced a special facility of Tranche Based EMI. Customers can fix the installments they wish to pay till the time the property is ready for possession. The minimum amount payable is the interest on the loan amount drawn. Anything over and above the interest paid by the customer goes towards Principal repayment. The customer benefits by starting EMI and hence repays the loan faster.

Accelerated Repayment Scheme

Accelerated Repayment Scheme offers you a great oppourtunity to repay the loan faster by increasing the EMI. Whenever you get an increment, increase in your disposable income or have lump sum funds for loan prepayment, you can benefit by
o o o

Increase in EMI means faster loan repayment Saving of interest because of faster loan repayment You can invest lump sum funds rather than use it for loan prepayment. The return from the investments also gives you the comfort of paying the increased EMI.

Security
Security for the loan is a first mortgage of the property to be financed, normally by way of deposit of title deeds and/or such other collateral security as may be necessary. Interim security may be required, if the property is under construction.

HOME IMPROVEMENT LOAN

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Features

Purpose
o o o o o o o o o o

External repairs Tiling and flooring Internal and external painting Plumbing and electrical work Waterproofing and roofing Grills and aluminium windows Waterproofing on terrace Construction of underground/overhead water tank Paving of compound wall (with stone/tile/etc.) Bore well Existing Customer 100% of the cost of improvement New Customer 85% of the cost of improvement

Maximum loan
o o

Subject to market value of the property

Maximum Term

15 years subject to your retirement age

Applicant and Co- Applicant to the loan

Home Loans can be applied for either individually or jointly. Proposed owners of the property will have to be co-applicants. However, the co-applicants need not be co- owners.

Adjustable Rate Home Loan

Loan under Adjustable Rate is linked to HDFC's Retail Prime Lending Rate (RPLR). The rate on your loan will be revised every three months from the date of first disbursement, if there is a change in RPLR, the interest rate on your loan may change. However, the EMI on the home loan disbursed will not change*. If the interest rate increases, the interest component in an EMI will increase and the principal component will reduce resulting in an extension of term of the loan, and vice versa when the interest rate decreases. Conditions Apply

Fixed Rate: Interest Rate

Please call HDFC Home Line for the latest interest rates.

Fees
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1% of the loan amount applied plus applicable service taxes and cess.

No Charges for

Replacement of cheques Income Tax Certificates Accelerated Repayment Option

Redemption Charges Adjustable Rate Home Loan [ARHL]

If a prepayment is made within 3 years of the first disbursement, under Adjustable Rate Home Loan (ARHL) option early redemption charges of 2% of the amount being prepaid is payable if the amount being repaid is more than 25% of the opening balance.

Fixed Rate Home Loan [FRHL]

Redemption charges of 2% of the amount being prepaid is payable if the amount being repaid is more than 25% of the opening balance Incase of commercial refinance under both the FRHL and ARHL an early redemption charge of 2% is payable. You may be required to submit copies of your Bank Statements or any other documents that HDFC deems necessary to verify the source of prepayment.

How to Apply
It's simple! You can choose any of the following ways to get in touch with us!

Call the HDFC Home Line in your city

Our sales representatives will reach out to you for assistance

HDFC Office Locator

We have over 200 offices with flexible timings keeping in mind your work timings. The offices are conveniently located at a place closer to you.

SMS HDFCHOME to 56767

Documents

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You can download the Application Form and submit along with the following documents for an approval of loan.

Salaried Customers
Application form with photograph Identity and Residence Proof Latest Salary-slip Form 16 Last 6 months bank statements Processing fee cheque

Self Employed Professionals

Application form with photograph Identity and Residence Proof

Self Employed Businessman

Application form with photograph Identity and Residence Proof

Education Qualifications Education Qualifications Certificate and Proof of business Certificate and Proof of business existence existence Last 3 years Income Tax returns (self and business) Last 3 years Profit /Loss and Balance Sheet Last 6 months bank statements Processing fee cheque Business profile Last 3 years Income Tax returns Last 3 years Profit /Loss and Balance Sheet Last 6 months bank statements (self and business) Processing fee cheque

Detailed cost estimate from architect/engineer for the property to be constructed/ renovated.

Security

Existing customer
o

Extension of the mortgage already created on the property financed and/or other security as may be required by HDFC. For others, security for the loan is a mortgage on the entire property being improved and/or other security as may be required by HDFC.

New Customer
o

HOME EXTENSION LOAN

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Features

Purpose

HDFC Home Extension Loan makes it convenient for you to extend or add space to your home. Be it an additional room, a larger bathroom, or even enclosing an open balcony.

Maximum loan

85% of the cost of extension

Maximum Term

20 years subject to your retirement age

Applicant and Co- Applicant to the loan

Home Loans can be applied for either individually or jointly. Proposed owners of the property will have to be co-applicants. However, the co-applicants need not be co- owners.

Adjustable Rate Home Loan

Loan under Adjustable Rate is linked to HDFC's Retail Prime Lending Rate (RPLR). The rate on your loan will be revised every three months from the date of first disbursement, if there is a change in RPLR, the interest rate on your loan may change. However, the EMI on the home loan disbursed will not change*. If the interest rate increases, the interest component in an EMI will increase and the principal component will reduce resulting in an extension of term of the loan, and vice versa when the interest rate decreases. Conditions Apply

Fixed Rate:

Interest Rate Please call HDFC Home Line for the latest interest rates

Fees
1% of the loan amount applied plus applicable service taxes and cess.

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No Charges for

Replacement of cheques Income Tax Certificates Accelerated Repayment Option

Redemption Charges Adjustable Rate Home Loan [ARHL]

If a prepayment is made within 3 years of the first disbursement, under Adjustable Rate Home Loan (ARHL) option early redemption charges of 2% of the amount being prepaid is payable if the amount being repaid is more than 25% of the opening balance.

Fixed Rate Home Loan [FRHL]

Redemption charges of 2% of the amount being prepaid is payable if the amount being repaid is more than 25% of the opening balance Incase of commercial refinance under both the FRHL and ARHL an early redemption charge of 2% is payable. You may be required to submit copies of your Bank Statements or any other documents that HDFC deems necessary to verify the source of prepayment.

How to Apply
It's simple! You can choose any of the following ways to get in touch with us!

Call the HDFC Home Line in your city - Our sales representatives
will reach out to you for assistance

HDFC Office Locator We have over 200 offices with flexible timings keeping in mind your work timings. The offices are conveniently located at a place closer to you. SMS HDFCHOME to 56767

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Documents
You can download the Application Form and submit along with the following documents for an approval of loan

Salaried Customers
Application form with photograph Identity and Residence Proof Latest Salary-slip Form 16 Last 6 months bank statements Processing fee cheque

Self Employed Professionals

Application form with photograph Identity and Residence Proof

Self Employed Businessman

Application form with photograph Identity and Residence Proof

Education Qualifications Education Qualifications Certificate and Proof of business Certificate and Proof of business existence existence Last 3 years Income Tax returns (self and business) Last 3 years Profit /Loss and Balance Sheet Last 6 months bank statements Processing fee cheque Business profile Last 3 years Income Tax returns Last 3 years Profit /Loss and Balance Sheet Last 6 months bank statements (self and business) Processing fee cheque

Detailed cost estimate from architect/engineer for the property to be extended.

Security

Existing customer
o

Extension of the mortgage already created on the property financed and/or other security as may be required by HDFC. For others, security for the loan is a mortgage on the entire property being improved and/or other security as may be required by HDFC

New Customer
o

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HOME EQUITY LOANS

HDFC Home Equity Loans helps you encash the present market value of the property by taking a loan by mortgaging the property.

Features

Purpose
Loan can be for any purpose. However, the funds should not be used for speculation or any illegal purposes. Customers have benefited by taking loans to meet the following funding requirements o Education o Marriage Expenses o Medical Expenses

Property
o o

Residential Non Residential - Should be Fully Constructed - Should be a Freehold property having a clear and marketable title.

Adjustable Rate Home Loan

Loan under Adjustable Rate is linked to HDFC's Retail Prime Lending Rate (RPLR). The rate on your loan will be revised every three months from the date of first disbursement, if there is a change in RPLR, the interest rate on your loan may change. However, the EMI on the home equity loan disbursed will not change*. If the interest rate increases, the interest component in an EMI will increase and the principal component will reduce resulting in an extension of term of the loan, and vice versa when the interest rate decreases. Conditions Apply

Fixed Rate Maximum Loan

o o o

Existing Customers - Balance of 60% of the market value and present loan outstanding New Customers - 50% of the market value of the property (including the cost of the land) Subject to - Minimum Market Value of the property being Rs.5,00,000 for Residential property and Rs.7.50 Lacs for Non Residential Property - Repayment Capacity of the customer

Maximum Term Property Type

Residential 89

Repayment Option No. of Years

EMI Based 15

Non Residential Residential and Non Residential

EMI Based Simple Interest

10 2

- Subject to retirement age of the customer

Fees
1% of the loan amount plus applicable service tax and cess.

Redemption Charges Adjustable Rate Home Loan [ARHL]

If a prepayment is made within 3 years of the first disbursement, under Adjustable Rate Home Loan (ARHL) option early redemption charges of 2% of the amount being prepaid is payable if the amount being repaid is more than 25% of the opening balance.

Fixed Rate Home Loan [FRHL]

Redemption charges of 2% of the amount being prepaid is payable if the amount being repaid is more than 25% of the opening balance Incase of commercial refinance under both the FRHL and ARHL an early redemption charge of 2% is payable. You may be required to submit copies of your Bank Statements or any other documents that HDFC deems necessary to verify the source of prepayment.

How to Apply
It's simple! You can choose any of the following ways to get in touch with us!

Call the HDFC Home Line in your city - Our sales representatives
will reach out to you for assistance

SMS HDFCLAP to 56767

Documents
You can download the Application Form and submit along with the following documents for an approval of loan.

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Salaried Employees
Application form with photograph Identity and Residence Proof Latest Salary-slip Form 16 Last 6 months bank statements

Self Employed Professionals

Application form with photograph Identity and Residence Proof

Self Employed Businessman

Application form with photograph Identity and Residence Proof

Education Qualifications Education Qualifications Certificate and Proof of business Certificate and Proof of business existence existence Last 3 years Income Tax returns (self and business) Last 3 years Profit /Loss and Balance Sheet Last 6 months bank statements Processing fee cheque Business profile Last 3 years Income Tax returns (self and business) Last 3 years Profit /Loss and Balance Sheet Last 6 months bank statements (self and business) Processing fee cheque

Processing fee cheque

Title Documents of the property, Approved Plan

Security
Security for the loan is a first mortgage of property against which HDFC has advanced the loan. In addition, HDFC may request for additional, interim, collateral security. Liquid securities in the nature of shares, fixed deposits etc. may be accepted as additional securities on a selective basis.

Application Form
Please enter your details * Name * Mailing Address Mobile phone no

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* Residence phone no * Office phone no Best calling time * EmailID Employment Details Company name Address Designation *Monthly income(Pls convert to rupees) * Nearest HDFC office India Overseas Nearest office Total cost Loan amount required You need information about Would you like us to send you any brochures or applications forms Yes Any other inquiry

No

Enter the code shown:

OBJECTIVE/SCOPE OF PROJECT
To study the background information and functioning of the major housing finance institutes in India. To make an in depth study of the housing financing institution- Housing Development Finance Corporation (HDFC) in the private sector. To assess the socio economic characteristics of beneficiaries in HDFC. To analyse the degree of satisfaction of the beneficiaries in availing loans from HDFC. To examine the low cost housing technology and its consequent benefits.

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RESEARCH METHODOLOGY

Primary Data
The Primary data are those that are collected afresh and for the first time and thus happened to be original in character.

Secondary Data
The Secondary data are those that have already been collected by someone else and have already pass through the statistical process. It has been collected from internet, books, journals and newspapers and also from websites like:

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www.altavista.com www.msn.com www.HDFC.com

LIMITATIONS

As HDFC is a huge process therefore it is very difficult to cover each and every aspect in this project. It is not an economical project. To collect information related to this is really a difficult task. Time consuming project.

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SUGGESTIONS

High dependence on individual loans should be avoided by the housing finance companies. Affordable housing for all should be ensured. For this, the Government should incentivise investments in affordable housing. The Centre should draft a Model Legislation for the housing sector to address the problem of housing shortage of about 20 million dwelling units in both rural and urban areas. Housing policies must meet broader economic goals in the best way, thereby ensuring regulated urban development. Any urban housing policy must give the first priority to urban poor who actually run the urban growth engine. Else, it will only serve as one of the futile incentives, which do nothing than promoting indiscriminate migration.

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CONCLUSION
The account given in the project undertaken at the national levels indicates that many governments are actively seeking improvements to the living environment of their populations. It should be noted that most developing countries have made the reported achievements in spite of difficult economic circumstances. Partly as a result of this, very few countries have been able to undertake holistic reorganisation of the shelter sector as envisaged in the global strategy for shelter. Most governments have taken a step-by-step approach to reorganisation of the shelter sector, with a focus on improvements, whether physical, legal, institutional or other, in the less complex issues. Thus, there are many cases of institutional reorganisation in order to improve the framework governing the shelter sector. Similarly, there are many cases of revision of the legislative framework governing the shelter sector. Some of the initiatives are supported by newly established databases and geographic information systems, using micro-computer facilities. In addition, a number of governments have taken steps to involve the private sector, NGOs and CBOs in shelter strategies. The enabling approach has gradually been accepted by most countries.

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Despite this encouraging progress, action by governments needs to be intensified in the three crucial areas of access to land, infrastructure and finance, all key areas for public sector intervention for establishing a fully enabling framework. Only a limited number of countries have taken effective action to ensure an adequate supply of land for shelter programmes. In the case of finance most activities concern tapping of resources from within the country both from institutional sources such as social security funds as well as by mobilising savings of poor communities. Under the current economic situation only a limited can be expected in most developing countries. HDFC substantially contributed to the development of a market-oriented housing finance system in India through its own growth and through the provision of technical assistance to other housing finance institutions (HFIs). Its own financial success inspired entrants to the housing finance sector, and changed perceptions toward marketoriented housing finance in India in a positive way. HDFC's efforts to influence government policies benefitted the housing finance sector. Its proposals for streamlined foreclosure procedures and mortgage insurance could also lead to the development of a secondary mortgage market. HDFC faced increased competition from new HFIs that were affiliated with large, government-controlled financial institutions. The National Housing Bank (NHB), the appropriate focus of USAID's HG-003 program, had the critical role of moving the basis for housing finance intermediation away from competition in regulatory privilege, and toward competition in the service provided.

HDFC continued to mobilize funds primarily from the corporate sector; it obtained only about 15 percent of its deposits from the household sector. This approach limited the diversification, and increased the interest-sensitivity, of its funding base. However, HDFC carefully managed other aspects of portfolio risk: it nearly matched the average maturities of its assets and liabilities, and maintained very low rates of loan delinquencies, thereby minimizing both term-mismatch and credit risk. HDFC successfully met every objective indicator of HG low-income targeting goals, but not all of the procedural requirements. The primary factor responsible for HDFC's success in servicing lower-income households was its geographic expansion out of Bombay and into other cities where housing was more affordable. HDFC's rapidly-growing corporate loan program supported the construction of rental housing. New HFIs would do well to emulate HDFC's initial, conservative attitude until they acquired experience in implementing prudent loan appraisal policies on these large corporate loans. In addition to the management capabilities referred to implicitly above, HDFC management developed a systematic planning process, comprehensive written policies, and effective management information systems. It aimed to retain and develop management and staff, automated many functions, and delegated significant authority to the branches. Most fundamentally, HDFC's success within a changing regulatory and

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financial environment rested on its flexibility in periodically reassessing goals, reexamining the institution's activities, and developing new ways of operating in order to adapt to change. It may be concluded that although many governments have taken positive steps towards national shelter strategies, their impact on the living environment of the poor remains rather limited. It will be possible to make an assessment of the situation only when countries begin to apply the shelter sector performance indicators vigorously.

BIBLIOGRAPHY

www.altavita.com , Establishment of housing finance www.msn.com , Housing Finance Companies www.hdfc.com , all information related to HDFC

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ANNEXURE Housing Finance FAQS

Q1. For what purpose Housing Loans are available? Ans. Housing Loans are available for the construction or purchase of:a) b) c) d) New House, flat Existing house/flat, not more than 15 years old. Plot of land For repairing and additions and alteration of premises.

Q2. Who is eligible for Housing Loan? Ans. i) Individual having income from:a) Employement/Self employment b) Business and c) Property and Invesments 99

ii) Co-Applicant/Borrower Co-owners of premises or property can be co-applicants for the loan application. Husband and wife where both having individual income are ideal co-applicants. Q3. What maximum loan amount can be obtained? Ans. Loan amount is decided on the following aspects:i) The loan amount is based on the total cost of property, which includes cost of construction of house/flat, cost of land, cost of stamp duty and registration charges, co-related with the repayment capacity of the borrower. ii) The actual loan amount advanced by such institutions is generally 75% to 85% of the above total cost, and or amount worked out based on 36 times of monthly net income and repayment capacity of borrower, which ever is less. The balance amount is to be continued by the borrower alone. Q4. What is the loan repayment period? Ans. Repayment period is different for each financial institute, depending upon their company policy. This period differs from 5 years (short term loan) to 20 years (long term loan) and normally shall not exceed the age of retirement or completion of age of 65 years of individual.

Home Loan- FAQS

Q1. How will HDFC decide my home loan eligibility? Ans. We assess the customers repayment capacity while deciding on the home loan eligibility. Repayment capacity is based on factors such as income, age, qualifications, number of dependants, spouse's income, assets, liabilities, stability and continuity of occupation and savings history. And, of course, our main concern is to make sure that you can comfortably repay the loan amount. Q2. What are the different interest rate options you offer? Ans. We offer the following loan options

Adjustable Rate Home Loans Fixed Rate

Q3. How do I apply for the loan? Ans.

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HDFC Home Line HDFC Office Locator Apply Online SMS HDFCHOME to 6767

Q4. What is an EMI? Ans. You repay the loan in Equated Monthly Instalments (EMIs) comprising principal and interest. Repayment by way of EMI commences from the month following the month in which you take full disbursement. Q5. What is pre-EMI interest? Ans. Pending final disbursement, you pay interest on the portion of the loan disbursed. This interest called pre-EMI interest. Pre-EMI interest is payable every month from the date of each disbursement upto the date of commencement of EMI. Q6. What is Tranche Based EMI repayment option ? Ans. To help customers save pre-EMI interest, we have introduced a special facility of Tranche Based EMI. For under construction properties customers can choose the instalments they wish to pay, till the time the property is ready for possession.

Anything paid over and above the interest by the customer goes towards Principal repayment. The customer benefits by starting EMI and hence repays the loan faster. Q7. Can I repay my loan ahead of schedule? Ans. Yes, you can repay the loan ahead of schedule by making Lump sum payments or choose our accelerated repayment scheme. There are NO charges for choosing an accelerated repayment scheme and for lump sum payments under Adjustable Rate Home Loan. Adjustable Rate Home Loan [ARHL] If a prepayment is made within 3 years of the first disbursement, under Adjustable Rate Home Loan (ARHL) option early redemption charges of 2% of the amount being prepaid is payable if the amount being repaid is more than 25% of the opening balance. Fixed Rate Home Loan [FRHL] Redemption charges of 2% of the amount being prepaid is payable if the amount being repaid is more than 25% of the opening balance. Incase of commercial refinance under both the FRHL and ARHL an early redemption charge of 3% is payable. You may be required to submit copies of your Bank Statements or any other documents that HDFC deems necessary to verify the source of prepayment. 101

Q8. Do I get a tax benefit on the loan? Ans. Yes. Resident Indians are eligible for certain tax benefits on principal and interest components of a loan under the Income Tax Act, 1961. Interest repayment of Rs. 1,50,000 p.a. can get you a tax saving upto about Rs. 50,490 p.a. Moreover, you can get added tax benefits under Sec 80 C on repayment of principal amount upto Rs. 1,00,000 p.a. that can further reduce your tax liability by about Rs. 33,660 p.a. Q9. What security will I have to provide? Ans. The security for the loan is a first mortgage of the property to be financed, normally by way of deposit of title deeds and/or such other collateral security as may be necessary. Interim security may be additionally required, if the property is under construction. Collateral or interim security could be assignment to HDFC of life insurance policies, the surrender value of which is at least equal to the loan amount, guarantees from sound and solvent guarantors, pledge of shares and such other investments that are acceptable to HDFC.

Please do ensure that the title to the property is clear, marketable and free from encumbrance. To elaborate, there should not be any existing mortgage, loan or litigation, which is likely to affect the title to the property adversely. Q10. Does the Agreement for Sale have to be registered? Ans. In many states in India, the Agreement for Sale between the builder and purchaser is required by law to be registered. You are advised, in your own interest to lodge the Agreement for registration within four months of the date of the Agreement at the office of the Sub-Registrar appointed by the State Government, under the Indian Registration Act, 1908. Q11. Are there any restrictions on transfer of immovable properties? Ans. In terms of Chapter XX C of the Income Tax Act, 1961, the Central Government has the first option to purchase certain immovable properties exceeding certain value and as such transactions covered by this Chapter can be proceeded with only after complying with the requirements prescribed therein. Q12. Will HDFC finance persons of Indian origin holding foreign passports? Ans. As per current guidelines of the Reserve Bank of India persons of Indian origin holding foreign passports are eligible for loans with HDFC. Q13. How is my loan reassessed if there is a change in status from Non-Resident Indian to Resident Indian? 102

Ans. The repayment capacity of the applicant(s) based on Resident status is reassessed and a revised repayment schedule worked out. The new rate of interest will be as per the currently applicable rate of Resident Indian loans (for that specific loan product). This revised rate of interest would be applicable on the outstanding balance being converted. A letter is given to the customer confirming the change of status.

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