In a move set to boost India’s affordable housing sector, the National Housing Bank (NHB) has announced new measures to support Housing Finance Companies (HFCs), enabling them to access funds at lower borrowing costs.
This strategic initiative aims to make home loans cheaper, improve liquidity in the housing finance market, and accelerate the “Housing for All” mission under Pradhan Mantri Awas Yojana (PMAY).
What’s Behind NHB’s Support to HFCs?
The NHB — India’s apex body for housing finance regulation — has introduced targeted refinancing schemes for HFCs. These schemes provide low-cost funding to lenders, who can then pass on the benefit to end borrowers through reduced home loan interest rates.
This measure also ensures that smaller and mid-sized HFCs gain access to liquidity, strengthening the overall housing finance ecosystem.
How It Benefits Borrowers
Lower Interest Rates:
With HFCs borrowing at reduced costs, borrowers can enjoy cheaper EMIs on new and existing home loans.
Improved Credit Flow:
The initiative ensures that HFCs have adequate funds to extend credit to homebuyers and developers.
Support for Affordable Housing:
The NHB’s focus is particularly on low-income and first-time homebuyers, aligning with the government’s affordable housing objectives.
Market Stability:
By improving liquidity, the NHB ensures steady growth in housing finance, even during periods of economic uncertainty.
Impact on the Housing Sector
The NHB’s intervention is expected to:
Boost demand for housing loans.
Strengthen HFC balance sheets.
Improve access to affordable housing in urban and semi-urban areas.
Enhance the overall efficiency of India’s housing finance market.
Industry experts believe that this move could reduce average home loan rates by 25–50 basis points, depending on the lender’s pass-through rate.
FAQ:
Q1. What is the NHB’s refinancing support to HFCs?
A: The NHB provides low-cost funding to HFCs so they can offer cheaper home loans to customers.
Q2. How does it affect home loan borrowers?
A: Borrowers benefit from lower EMIs and improved access to home financing.
Q3. Will all HFCs benefit from this scheme?
A: Most registered HFCs can access NHB’s refinancing, subject to eligibility and lending performance.
Q4. Does this apply only to affordable housing loans?
A: The focus is primarily on affordable and priority-sector housing, though other segments may also benefit indirectly.
Q5. How soon will rates come down?
A: Rate changes depend on each HFC’s refinancing cycle, but effects could be visible within one to two quarters.
Conclusion
The NHB’s support for HFCs marks a major step in strengthening India’s housing finance system. By lowering borrowing costs for lenders, the move ensures more affordable home loans, wider credit access, and renewed momentum in the real estate market.
As housing demand continues to rise, these measures could significantly drive homeownership growth and revitalize the affordable housing segment across India.
Published on : 10th October
Published by : SMITA
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