MHUPA : Rajiv Rinn Yojana RRY Scheme

Organization :Ministry of Housing and Urban Poverty Alleviation
Facility :Rajiv Rinn Yojana RRY Scheme

Home Page :http://mhupa.gov.in/
Get more details here :http://mhupa.gov.in/RRY/RRY_Page.htm

RRY Scheme :

Rajiv Rinn Yojana (RRY) is an instrument to address the housing needs of the EWS/LIG segments in urban areas, through enhanced credit flow.

Related : MHUPA RAY Rajiv Awas Yojana Scheme : www.statusin.in/4733.html

It is also formulated to channelize institutional credit to the poorer segments of the society and increasing home ownership in the country along with addressing housing shortage. RRY has been formulated by modifying the Interest Subsidy Scheme for Housing the Urban Poor (ISHUP) piloted in the 11th Plan period with enhanced scope and coverage. RRY is a Central Sector Scheme applicable in all the urban areas of the Country.

RRY provides for interest subsidy of 5% (500 basis points) on loans granted to EWS and LIG categories to construct their houses or extend the existing ones. Loan upper limit Rs 5 lakh for EWS and 8 lakh for LIG; interest subsidy would, however, be limited to the first Rs 5 lakh of the loan amount, in case the loan exceeds this amount.

Rajiv Rinn Yojana is a target driven scheme. The overall target for the 12th Plan period is 1 million (or 10 lakh) dwellings across country including slum and non-slum dwellers. The Targets for the States for the current Financial Year (2013-14) are periodically fixed and conveyed to the concerned department(s).

Housing and Urban Development Corporation (HUDCO) and National Housing Bank (NHB) have been designated as the Central Nodal Agencies for the Scheme.

Features Of The Scheme :
Purpose :
The Scheme will provide home loan with Central Government interest subsidy to EWS/LIG persons for acquisition/ construction of house to such beneficiary, who does not own a house in his/her name or in the name of his/her spouse or any dependent child. Assistance would also be available to such of the EWS/LIG beneficiaries with less than 40 Sq. m who intend to make additions to the living areas of existing dwelling units by extending the same. Such beneficiaries who own land in any urban area but do not have any pucca house in their name or in the name of their spouse or any dependent child will also be covered under the Scheme.

Eligibility :
The economic parameter of EWS is defined as households having an average annual income up to Rs. 1,00,000/- and the economic parameter of LIG is defined as households having an average annual income between Rs.1,00,001/- up to Rs.2,00,000/-. This will be subject to revision by the Steering Committee of the Scheme from time to time.

Loan amount admissible :
The scheme will provide an interest subsidy for a maximum amount of Rs.5,00,000 for an EWS individual for a house at least of 21 sq.mts. There should be a provision for toilet wherever new construction of house is contemplated. Additional loans, if needed would be at unsubsidized rates. The loan tenure can be between 15 – 20 years.

A maximum loan amount of Rs.8,00,000 for a LIG individual will be admissible. However, subsidy will be given for loan amount up to Rs. 5 lakhs only. Additional loan amount between Rs 5 lakh and 8 lakh, if taken would be at unsubsidized rates. A beneficiary can build or purchase a house with a minimum carpet area of 28 Sq. mts as per his/her convenience. There should be a provision for toilet wherever new construction of house is contemplated. The loan tenure can be between 15 – 20 years.

Terms for Loan and Subsidy Reimbursement :
The subsidy will be 5% p.a. on interest charged on the admissible loan amount for EWS and LIG, for construction or acquisition of a new house or for carrying out addition (of a room / kitchen / toilet / bathroom) to the existing building.

The subsidy will be passed on as follows :
The Scheduled Commercial Banks and Housing Finance Companies (collectively called Primary Lending Institutions or PLIs) will sign a MOU with any of the Central Nodal Agencies (namely HUDCO and NHB) based on the agreed target number of beneficiaries that the Bank/ HFI would be servicing.

The PLIs will sanction loans after due diligence and disbursement of the loan would be as per the requirements of the borrower.

The beneficiaries will be charged an interest net of the fixed subsidy of 5% (500 basis points) from the prevailing rate of interest of the PLIs. The PLIs will deduct the interest subsidy amount from the Equated Monthly Installment (EMI) of the borrower and debit the net EMI.

After sanctioning and disbursing the eligible loans, the PLI will claim reimbursement of subsidy from the CNAs (namely HUDCO and NHB) by submitting their claims on the prescribed format on a quarterly basis.

The Government of India will release the subsidy amount to the CNAs immediately but not later than two months based on demand for sanction of subsidy received from the CNAs.

CNAs would send their demand for sanction of subsidy with all supporting documents including details of loan/subsidy amount during the last quarter, based on the inputs received from the PLIs

Selection of Beneficiaries :
The borrowers under the scheme must belong to the EWS or LIG, and must have a plot of land for the construction or have identified a purchasable house as part of a group housing/apartment scheme or an existing house where addition to the living space is intended to be made. Borrowers would be free to approach and negotiate a loan under the Scheme directly with the lender. However, it is envisaged that such borrowers would be few. Most borrowers and lenders would require the intercession of State Governments / Urban Local Bodies (ULBs) to identify borrowers with land, help them with preparation of papers and liaise for them with the lenders

Applicants :
** Applicants planning to form cooperative group housing societies or organizations like Employees Welfare Housing, Labour Housing, etc. should be given preference and wherever possible construction of houses by such cooperatives by way of 1+3 storied buildings should be promoted so that cost of land is shared among beneficiaries. However, this is not a mandatory requirement. Both individuals as well as Group Housing borrowers are equally eligible under the scheme.
** If the Housing co-operative societies approach the bank for availing the benefits under the scheme the liability for the loan can be joint and/ or several.
** The borrowers selected by State / ULBs / banks should as far as possible be in the ratio of 50 :50 respectively for EWS and LIG categories.
** The loan application can be made directly or through the ULB or the local agency identified by the State for the purpose, or through the voluntary NGOs who will ensure that it is complete with the necessary certification.
** The documentation will be as per the procedural requirement of the lender. However the lenders shall prescribe simpler forms (in local languages) and relaxed norms keeping in view the risk guarantee provided by Credit Risk Guarantee Fund scheme to enable better access for the borrowers.
** The lenders will sanction the loan as per their own risk assessment and procedural requirements
** In case of beneficiaries availing loan for construction of houses, release of loan will be linked to the pace of construction, which ideally is to be completed in two year. The lending Bank will monitor the progress of construction. This is equally applicable when the beneficiary proposes to buy the house from a private builder/ developer as part of a group housing or apartment complex