HBA is admissible to :

•  A Permanent railway employee or a temporary Railway employee with 10 years of service.
•  Officers of all India services (IAS, IPS, IFS) on deputation to the Railways continuously for 6 years.
•  If both Husband and wife are Railway employees, advance is admissible to any one of them. Where a house-site is owned jointly by husband and wife, amount will be sanctioned only if both agree to mortgage the same to Government.
• If both Husband and wife are Government Servants, the pay of both of them will be taken into consideration for calculating the ceiling limit.
• A Railway employee under suspension may be granted HBA on furnishing collateral security in the shape of mortgage bond from two permanent Railway employees.

HBA is granted for the following purposes:

• Purchase of a plot for construction of a house.
• Construction of a house on a plot already owned by a Railway employee or jointly with his/her spouse.
• Enlargement of an existing house.
• Purchase of a ready built house of flat.
• Repayment of loan taken from Govt/private sources for constructing a house.

Cost ceiling

•  134 times pay in Pay Band subject to a minimum of 7.5 Lakh and maximum of 30 Lakhs.

Amount of Advance

• 34 times the Basic Pay + Grade Pay or Rs. 7,50,000 or the actual cost or repaying capacity whichever is less.
• For enlargement of an existing house, 34 times the Basic Pay + Grade Pay or Rs. 1,80,000 or the actual cost whichever is less.
• In case of construction of a house in rural area, the amount of advance is 80% of the actual cost of construction and land.
• For purchase of plot/land and mount not exceeding 20% of advance in case of single storied and 15% in case of double storied is permitted.

Rate of Interest

Upto Rs. 50,000                 5%

Upto Rs. 1,50,000             6.5%

Upto Rs. 5,00,000             8.5%

Upto Rs. 7,50,000             9.5%

• Penal interest of 2.5% for violating conditions.
• 0.5% reduction for promoting small family norms.
• Rate of interest prevalent on the date of release of advance/first instalment shall be applicable.

Recovery

Principal               –    180 months

Interest                 –    60 months

Purchase of land and construct house – The following month of completing construction or 24 months after granting first installment whichever is earlier.

Construction of house – The following month of completing construction or 18 months after granting first installment whichever is earlier.

Source:  Indian Railway Employee

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