Fund on Cards to Of­fer Guar­an­tee for Home Loans

Govt move to back bor­row­ers oth­er­wise inel­i­gi­ble due to poor credit rat­ing

The Economic Times - - Front Page - Deepshikha.Sikar­war @times­

New Delhi: The govern­ment is con­sid­er­ing a fund that will pro­vide guar­an­tees for those who won’t oth­er­wise be eligible for a hous­ing loan, al­low­ing them to bor­row funds to ac­quire a home, said a se­nior fi­nance min­istry of­fi­cial. It’s be­ing en­vis­aged as part of a pack­age be­ing pre­pared by the govern­ment to help the hous­ing sec­tor, which is bur­dened by heavy debt, stalled projects and un­sold homes.

“This fund would es­sen­tially sup­port bor­row­ers who are not rated well and not eligible for a loan from a bank,” the of­fi­cial told ET. A guar­an­tee could also help lower in­ter­est rates for those oth­er­wise eligible for loans. The govern­ment is also ex­am­in­ing the fea­si­bil­ity of a stressed asset fund un­der the pack­age, which will help com­plete stalled projects. A bor­rower will be able to avail of the guar­an­tee from the pro­posed fund for a small fee, the of­fi­cial said. This could aid those with­out steady in­come flows and credit his­to­ries to be­come eligible for loans. This seg­ment has tra­di­tion­ally re­lied on the in­for­mal sec­tor for credit that comes at a high cost.

The credit en­hance­ment fund could bring more buy­ers into the hous­ing mar­ket

Govt Keen on Re­viv­ing Hous­ing

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