House Building advance to Defence Service Personnel (Army, Navy and Air Force) – MoD Order dated 19.06.2023

F No. 15(1)/2017/D(Pay/Services)
Government of India
Ministry of Defence
Department of Military Affairs

New Delhi, Dated 19.06.2023

To
The Chief of the Army Staff
The Chief of the Air Staff
The Chief of the Naval Staff

Subject: Grant of House Building advance to Defence Service Personnel (Army, Navy and Air Force) – regarding.

Sir,

In supersession of this Ministry’s letter No. 15(1)/2009/D(Pay/ Services) dated 24-07-2009, I am directed to say that the President has pleased to decide that the Defence personnel may be granted House building Advance under the House Building Advance Rules promulgated by the Ministry of Housing & Urban Affairs vide OM No. 1.17011/11(4)/2016-H-III dated 09-11-2017 as amended from time to time. After considering the recommendations of the 7th CPC and other relevant factors the President is pleased to liberalise further the existing scheme of House Building Advance, as below:-

(a) 34 months’ basic pay subject to a maximum of ₹7 lakhs only (Rupees Seven lakhs), or cost of the house/ flat, or the amount according to repaying capacity, whichever is the least for construction/ purchase of new house/ flat.

(b) For expansion of existing house, the amount of HBA will be limited to 34 months’ basic pay subject to maximum of 6.00 lakhs only (Rupees Six lakhs), or  the cost of the expansion, or the amount according to repaying capacity, whichever is the least.

(c) Cost of the house to be built/ purchased (excluding the cost of plot) should not exceed 139 times of the basic pay of the employee subject to a maximum of 60 lakhs (Rupees Sixty lakhs) only. If the Head of the Department (HOD) is satisfied on the merits of the case, the cost ceiling may be relaxed up to a maximum of 25%. HOD means Adjutant General/ Chief of Logistics/ Air Officer-in-Charge Administration, as the case may be.

2. Repayment Capacity: – For the purpose of calculating the admissible loan amount, the repayment capacity of the central government employee shall be calculated as below: –

3. Applicable Rate of Interest and Methodology of Recovery of House Building Advance: –

(a) The Interest on Housing Building Advance for the financial year 2017-18 onwards shall be 8.50%. This shall be reviewed every three years to be notified In consultation with Ministry of Finance.

(b) The methodology of recovery of HBA shall continue as per the existing pattern of recovery of principal first in the first fifteen years in not more than 180 monthly instalments and interest thereafter in next five years in not more than 60 monthly instalments. The advance carries simple interest from the date of payment of first instalment.

(c) All cases of subsequent tranches/ instalment of HBA being taken by the employee in different financial years shall be governed by the applicable rate of interest in the year in which the HBA was sanctioned, in the event of change in the rate of interest.

Note: The clause of adding a higher rate of interest at 2.5% (two point five percent) above the prescribed rate during sanction of House Building Advance, as reproduced below, stands withdrawn.

“Sanction should stipulate the interest 2.5% over and above the scheduled rates with the stipulation that, if conditions attached to the sanction including those relating to the recovery of amount are fulfilled completely to the satisfaction of competent authority, a rebate on interest of the extent of 2.5% will be allowed”

4. Disbursement: :

(a) Advance for purchase of ready built house can be paid in one lump sum as soon as the applicant executes an agreement in the prescribed form. The employee should ensure that the house Is purchased and mortgaged to the Government within 3 months of drawl of the advances.

(b) Advance for purchase/ construction of new flat may be paid either in one lump sum or in convenient instalments at the discretion of the Head of Department. The employee should execute the agreement in prescribed form before the advance’ first instalment of advance is paid to him/ her. The amount drawn by the employee should be utilized for the purchase/ construction of the flat within one month.

(c) Advance for construction/ expansion of living accommodation, etc. shall be payable in two instalments of 50% each. The first instalment will be paid after the olot and proposed house/ existing house is mortgaged and the balance on the construction-reaching plinth level.

(d) Advance for expansion to be carried out on the upper storey of the house will be disbursed in two instalments, first instalment on executing the mortgage deed and the second instalment on the construction reaching roof-level.

(e) In the case of advance for purchase of plot and construction of house, the advance will be disbursed as below: –

1. Single Storeyed House: After agreement in prescribed form is executed on production of surety bond, 40% of the advance OF actual cost will be disbursed for purchase of plot. The balance amount will be disbursed in two equal instalments, first after the mortgage is executed and second on the construction reaching plinth level.
2. Double Storeyed House: 20% of advance for cost of plot will be disbursed on executing the agreement. The balance amount will be disbursed in two equal instalments, the first on executing the mortgage deed and the second on construction reaching plinth level.

5. Mortgage and Creation of Second Charge: –

(a) House shall be mortgaged on the behalf of President of India. However, the employee, if he wishes to take a second charge to meet the balance cost of the house/ plot or flat from recognized financial institutions, then he/ she May declare the same and apply for NOC at the time of the applying for HBA. NOC for second charge will be given along with sanction order of HBA. The total loan from HBA and from all other sources cannot be beyond ceiling cost of the house as defined under para 1 (c) above.

(b) In case if HBA is availed by both husband/ wife jointly,

• HBA Mortgage paper, insurance paper and other papers regarding property shall be submitted to one of the loan sanctioning authorities of their choice.
• A No Objection Certificate may be obtained from the 2nd loan sanctioning authority.
• The property mortgaged to behalf of President of India, shall be reconvened on the prescribed form to the central government employee concerned (or their successors in interest, as the case may be), after the advance together with interest thereon, has been repaid to Government in full and after obtaining No Demand Certificate in respect of HBA loan sanctioned by the 2″ loan sanctioning authority.

6. Insurance: –

(a) immediately on completion of construction/ purchase of house/ flat, the employee shall insure the house with the recognized institutions as approved by Insurance Regulatory and Development Authority (IRDA), for not less than the amount of advance and shall keep it so insured against damage by fire, flood and lightning till the advance together with interest thereon is repaid in full and deposit the policy documents with the Head of the Department (HOD). Renewal of insurance will be done every year and premium receipts produced for inspection of the HoD regularly.

(b) Penal interest of 2% over and above existing rate of interest will be recovered from the employee for those periods which are not covered by Insurance of the house.

7. Extant Rules: – Apart from above stated changes in relevant sections in the earlier version of House Building Advance rules, all other extant rules, terms and conditions of HBA will be applicable as prescribed under Ministry of Defence letter No.15(1)/99/D(Pay! Services) dated 16-04-1999 and 45(1)/2009/D (Pay/ Services) dated 24-07-2009 as amended from time to time shall continue to apply till further orders.

8. This letter issues with the approval of M/o Finance (Department of Expenditure) vide their I.D. No. 12(01)/2020/E.11.A dated 05.06.2023 and with the concurrence of Ministry of Defence (Finance) vide |. D. No. 3(2)2018-AG/PA/25-PA dated 07 June 2023.

Yours faithfully,

(Laxmi Balasubramanian)
Under Secretary to the Govt. of India

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Rate of Interest on House Building Advance (HBA) for Central Government Employees during 01.04.2023 till 31.03.2024: MoHUA OM dated 27.03.2023

I-17015/2(2)/2022/H.III/5
Government of India
Ministry of Housing & Urban Affairs
(Housing III Section)

Nirman Bhawan, New Delhi
Dated 27.03.2023

OFFICE MEMORANDUM

Subject: Applicable Rate of Interest on House Building Advance (HBA) for Central Government Employees during 01.04.2023 till 31.03.2024.

In pursuance to revision of interest rate by Ministry of Finance, Dept of Economic Affairs vide OM 5(2)-B(PD) /2023 dated 20.03.2023, the rate of interest applicable on House Building Advance sanctioned to Central Government Employees during FY 2023-24 (i.e. 1st April, 2023 to 31st March, 2024) will be 7.5% till further orders.

2. This issues with the approval of Competent Authority.

(Amita Gupta)
Under Secretary to the Govt. of India

To

All the Central Government Ministries/ Departments

Copy for information to:

1. PS to Hon’ble Minister, Ministry of Finance, North Block, New Delhi.
2. PS to Hon’ble Minister, Housing & Urban Affairs Minister, Nirman Bhawan, New Delhi.
3. Copy to NIC to upload on website of Ministry of Housing & Urban Affairs.
4. Copy to IT Cell for uploading in E-Office.

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Collect HBA Annual Certificate from each and every Government servant yearly in the month of July, prior to the release of the pay for the month of July.

File N0.12-01/2020-PAP
Government of India
Ministry of Communication
Department of Posts
(Establishment Division)/ P.A.P Section

Dak Bhawan, Sansad Marg,
New Delhi – 1100 01.
Date: 08th July 2021.

To

1. All Chief Postmasters General/ Postmasters General
2. Chief General Manager, BD Dte/Parcel Dte/ PLI Directorate
3. Director RAKNPA/ GM CEPT/ Directors of All PTCs,
4. Addl. Director General, Army Postal Service, R.K. Puram, New Delhi
5. All General Managers (Finance)/ DAP/ DDAP

Sub: Annual Certificate regarding insurance by the officials availing House Building Advance – Regd.

Sir/Madam,

I am directed to this Directorate letter of even number dated 14.02.2020 on the above noted subject.

2. It has been observed that the instructions contained in Rule 7(b) (now Rule 10) of House Building Advance Rules (HBA)- 2017 are not being followed scrupulously. The Rule provides that immediately on completion or purchase of house / flat, as the case may be, the Government servant concerned shall insure the house / flat at his own cost with recognized institutions as approved by IRDA for not less than the amount of advance and shall keep it so insured against damage by fire, flood and light, till the advance together with a sum of interest thereon is full repaid to Government and deposit the policy with Government. Numerous cases are, however, being referred for condonation of periods of non-insurance

3. The Rule further provides that the Heads of Departments are required to obtain a certificate annually in the month of July, before disbursement of the pay for the month of July from each and every Government servant.

Classification of Cities for HRA as per 7th CPC – X Y Z Classification of Cities for HRA 2020

4. The Circles are requested to follow the provisions of the Rule strictly and take suitable action against the defaulters where called for.

Yours faithfully,

(D.K. Tripathi)
Assistant Director General (Estt.)
Phone no.: 011-23096191

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From October 1, 2020 to March 31, 2022, the rate of interest on House Building Advances to Central Government Employees will be 7.9%.

No.I-17015/1/2021/H.III
Government of India
Ministry of Housing & Urban Affairs
Housing – III

Nirman Bhawan, New Delhi
Dated 19th April 2021

OFFICE MEMORANDUM

Subject: Interest rate on House Building Advance (HBA) to Central Government Employees – reg.

The undersigned is directed to state that in partial modification of this Ministry’s OM No. I.17011/11(4)/2016-H.III dated 09.11.2017 regarding House Building Advance Rules (HBA) – 2017, the rate of interest on House Building Advance to Central Government Employees will be @7.9% from 1st October 2020 to 31st March 2022 i.e., for 18 months.

Also check: Classification of Cities for HRA as per 7th CPC – X Y Z Classification of Cities for HRA

2. This issues with the approval of Competent Authority.

(Amita Gupta)
Under Secretary to Govt. of India

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HBA – House Building Advance Reduced from 8.5% to 7.9% for a Period of One Year

Ministry of Housing & Urban Affairs
House Building Advance Reduced from 8.5% to 7.9% for a Period of One Year

03 OCT 2019

The rate of interest on House Building Advance [HBA] has been reduced 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.

Also read: 7th Pay Commission House Building Advance

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.

Also check: Clarifications regarding House Building Advance

PIB

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Central Government employees have a low-interest house construction advance

Finance Minister Nirmala Sitharaman said the lowering of interest rates will encourage more government employees to buy new houses as they were “a major contributor” to the overall demand.

Also Read: 7th Pay Commission House Building Advance

New Measures to Boost Housing Sector

Relaxation of ECB guidelines for Affordable housing

• ECB guidelines will be relaxed to facilitate financing for home buyers who are eligible under the PMAY, in consultation with RBI.
• This is in addition to the existing norms for ECB for affordable housing.

House Building Advance

• The interest rate on House Building Advance shall be lowered and linked with the 10 Year G Sec Yields.
• Government servants contribute to a major component of demand for houses. This will encourage more government servants to buy new houses

Also Check: Clarifications regarding House Building Advance – HBA

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1-17011/6(3)/13/2018-H.III
Government of India
Ministry of Housing & Urban Affairs
Housing-III Section

Nirman Bhawan, New Delhi,
Dated: 1.08.2018

OFFICE MEMORANDUM

Subject: Clarifications regarding House Building Advance – reg.

The undersigned is directed to say that in partial modification to the Ministry of Housing & Urban Affairs OM No. 1.17011/11(4)/2016-H.III dated 09.11.2017 regarding House Building Advance Rules – 2017, the competent authority has approved to modify the provision of para 2(i) in place of the existing provision.

“Constructing a new house on the plot owned by the employee or the employee and the employee’s wife/husband jointly with the clear title of the plot”

All the other existing provisions in the said OM of even no. dated 09.11.2017 shall remain same.

(Shailendra Vikram Singh)
Director (IFD)
Tel:011-23062798

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Government of Haryana
Finance Department

ORDER

No.2/2/2004-WM(3)

Dated 18th July,2018

Subject: Grant of House Building/Marriage/Vehicle/Computer Advance to Haryana Government Employees.

Whereas, the eligibility limit of pay and admissibility for the purpose of grant of House Building, Marriage,Vehicle and Computer Advance were revised vide Finance Department’s letter No.2/2/2004-WM(3) dated 22nd November,2010, no.38/110/99-WM (5) dated 22nd November,2010, No.16/1/10-WM (6) dated 16th July,2010 and no.2/2/2007-WM (5) dated 22nd November,2010, respectively, Now, as per recommendations of 7th CPC, pay scales of state government employees have been revised. Accordingly, the question of enhancing the present eligibility limit of pay and admissibility for the purpose of grant of all types of Advances (House Building/Marriage/Vehicle and computer Advance) has been considered and it has been decided as under:-

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7th CPC House Building Advance

Government of India (Bharat Sarkar)
Ministry of Railways (Rail Mantralaya)
(Railway Board)

PC-VII No : 108/2018
RBE No. 101/2018

New Delhi, Dated: 13.07.2018

No. F(E)Spi./2008/ADV.J/6 (7th CPC)

The General Managers and PFAs
All Indian Railways & Production Units
(As per standard list)

Subject : Grant of Advances – Seventh Central Pay Commission recommendations – Amendment to rules on House Building Advance (HBA) to Railway servants.

Please refer to this Ministry’s letter of even number dated 05.12.2017 on the above cited subject,vide which, the revised rules relating to the grant of House Building Advance (HBA) as issued by Ministry of Housing & Urban Affairs (Housing-III Section) vide their OM No.I.17011/11(4)/ 2016-H-III dated 09.11.2017 pursuant to acceptance of 7th CPC recommendations, were mutatis-mutandis made applicable to Railway employees.

2. Further clarifications were issued vide this Ministry’s letter of even number dated 28.03.2018 and 27.04.2018.

3. Ministry of Housing & Urban Affairs vide their OM dated 29.06.2018 have now issued instructions regarding applicability of rules contained in their OM dated 09.11.2017 with effect from 01.01.2016 and enhancement of House Building Advance (HBA) in those cases which were sanctioned on or after 01.01.2016 but before 09.11.2017 and these are subject to conditions mentioned in their letter of 29.06.2018. A copy of the same is sent herewith, which shall be applicable mutatis-mutandis on the Railways.

3. Please acknowledge receipt.

4. Hindi version will follow.

(G.Priya Sudarsani)
Joint Director Finance (Estt.)
Railway Board

Encl.: As above
No. F(E)Spi./2008/ADV.J/6 (7th CPC)
New Delhi, Dated: 13.07.2018

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I-17011/11(4)/2016-H.III

Government of India
Ministry of Housing & Urban Affairs
Housing-III Section

Nirman Bhawan, New Delhi,
Dated : 29.06.2018

OFFICE MEMORANDUM

Subject: Interest bearing advances/ Seventh Central Pay commission recommendation on House Building Advance – enhancement in past cases regarding.

The undersigned is directed to invite attention to this Ministry’s OM No. I- 17011/11(4)/2016-H.III dated 09.11.2017 on the above-mentioned subject and to say that it has been decided in consultation with Ministry of Finance to make the aforesaid orders applicable with effect from 1st January, 2016. Accordingly, it has been decided that an enhancement of House Building Advance, if applied for, would be granted to government employee for an amount equivalent to the difference between the previously sanctioned amount and the new eligible amount determined on the basis of basic pay as per 7th CPC, in past cases, where HBA was sanctioned on or after 01.01.2016 but before 09.11.2017 subject to complying following conditions :

a) The Government employee should not have drawn the entire amount of HBA sanctioned under earlier orders and/ or where construction is not completed/full cost towards acquisition of house/ flat is yet to be paid.

b) There will be no deviation from the approved plan of construction on the basis of which the original sanction of House Building Advance was accorded. The revised cost of the original plan can, however, be considered for determining the additional amount, subject to the prescribed maximum limits.

c) Supplementary Mortgage Deed, Personal Bond and Sureties will be drawn and executed at the expense of the loanee.

d) The actual entitlement will be restricted to the repaying capacity computed on the basis of the formula laid down in this Ministry’s OM No I-17011/11(4)/2016-H.III dated 09.11.2017. It should be ensured that the entire amount of advance with interest is recovered before retirement of the Government servant

e) Rate of interest:

The rate of interest will be at 8.50% from the financial year 2017-18 onwards. This will be reviewed every three years to be notified in consultation with Ministry of Finance. However, the new rate of interest would be chargeable only on collective amount that would remain outstanding on grant of enhancement of HBA, i.e., the unpaid portion of previously sanctioned HBA plus the enhancement so granted. Thus, the amount of HBA that has already been re-paid on old rates will not attract the fresh interest charges.

2. However, the existing limit of maximum admissible amount of Rs. 25 lakhs for the purpose of construction/ purchase of new house/ flat and Rs. 10 lakhs for expansion of existing house/ flat would remain unchanged. In other words, the sum total of previously, sanctioned House Building Advance and the enhancement granted under these orders cannot exceed the aforesaid limits. In any case, not more than one enhancement is admissible to a Government employee.

3. The applications for enhanced House Building Advance should be submitted within six months from the date of issue of this order.

4. Ministries/ Departments with branch offices in the far-flung areas are be advised to give wider publicity to these orders through modern communication means so that there is no occasion for any representation for extending the time limit of six months on the grounds of late receipt of these orders.

5. This issues in supersession of all the earlier orders on the subject.

S/d,
(Shailendra Vikram Singh)
Director (IFD)
Tel: 23062798

To,
All the Ministries and Departments of the Government of India as per standard distribution list.

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