Ministry of Housing & Urban Affairs has reduced the rate of interest on House Building Advance [HBA] from existing 8.5% to 7.9% for a period of one year, irrespective of the loan amount of HBA. This will be with effect from 01st October 2019.
HBA is admissible to permanent employees and all those temporary employees also who have rendered 05 years of continuous service. The Ministries/Departments are delegated powers to sanction House Building Advance to their employees in accordance with the HBA rules. The scheme of HBA to Central Government Employees is aimed as a welfare measure providing assistance to the Government employees to construct/acquire house/flats of their own.
Finance Minister Nirmala Sitharaman, while announcing relief measures for the economy on last month, had also talked about a relief measure that directly impacts the Central government employees in the country. “Government servants contribute to a major component of demand for houses. This will encourage more government servants to buy new houses,” she had said. The FM had then announced lowering of the interest rate for House Building Advance (HBA) which in turn will benefit the government employees who wish to construct their own house. It may be remembered that the Government had earlier revised the House Building Advance (HBA) rules for Central Government Employees incorporating the accepted recommendations of the 7th Pay Commission.
The total amount of advance that a Central government employee can borrow is up to 34 months of the basic pay subject to a maximum of Rs. 25 lakh, or cost of the house, or the amount according to repaying capacity, whichever is the least for new construction/purchase of new house/flat.