Central Government Employees Can Benefit From House Building Advance at 7.9% Until March 2022 – Check Details

The total amount of advance that a central government employee can borrow is up to 34 months of base salary subject to a maximum of Rs. 25 lakh.

Central government employees, who wish to build their own house, can benefit from the House Building Advance (HBA). The HBA was used from October 1, 2020 to March 31, 2022, that is, for 18 months it will carry a simple interest rate of 7.9%. The government previously revised the House Building Advance (HBA) rules for central government employees incorporating the accepted recommendations of the 7th Compensation Commission.

In September 2020, the FM announced a cut in the interest rate for House Building Advance (HBA), thereby relieving and directly affecting employees of the country’s central government. Going forward, the House Building Advance (HBA) interest rate will be linked to the 10-year yield of G-Sec on the amount of the advance taken for the construction of a house.

In accordance with the recommendations of the 7th Wages Commission and the 2017 HBA rules, the total amount of the advance that a central government employee can borrow is up to 34 months of base salary subject to a maximum of Rs. 25 lakh, or the cost of the house, or the amount depending on the repayment capacity, whichever is less for a new construction / purchase of a new house / apartment.

The HBA amount for the house expansion is capped at Rs. 10 lakh or 34 months base salary or the cost of the house expansion or the amount depending on repayment capacity, whichever is less .

The HBA collection methodology will continue under the existing model of collecting principal first in the first fifteen years in 180 monthly installments and interest thereafter over the next five years in 60 monthly installments. The advance bears simple interest from the date of payment of the deposit.

The advance for the construction of houses can be used to repay a bank loan taken out in connection with the construction, purchase of a new house or a new apartment. HBA is eligible for permanent employees and all temporary employees who also have 5 years of continuous service.

Employees are eligible for a home construction advance on the date they have obtained loans from banks and other financial institutions, whether or not they have requested the construction advance. of housing before taking out the loan.

The advance for the construction of housing for the repayment of loans will be granted to eligible employees at one time. However, the government employee must produce the certificate of use of the HBA within one month from the date of release of the HBA.

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