7th Pay Commission House Building Advance News: Central Government Employees can avail of low-interest House Building Advance (HBA) till 31st March 2023. The current interest rate applicable to HBA is 7.1%. The Ministry of Housing & Urban Affairs had decreased the rate of interest on HBA to 7.1% till 31st March 2023 through an Office Memorandum dated April 1, 2022.
The HBA facility is provided to Central Government Employees as per the recommendations of the 7th Pay Commission. Under HBA rules, the employees of the Central Government can avail of interest-bearing advances for purposes such as: constructing a new house, purchasing a plot for constructing a house, expansion of living accommodation, purchase of ready-built houses or flats from housing boards, development authorities, registered builders etc.
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HBA can also be availed for repayment of loan or advance taken from a Government or HUDCO or private sources even if the construction has commenced.
Get up to Rs 25 Lakh at 7.1% interest
As per House Building Advance Rules (HBA) 2017, Central Government Employees can get up to 34 months of basic pay subject to a maximum ceiling of Rs 25 lakh as HBA. If the cost of the house/flat is less than Rs 25 lakh, then the employee will be eligible to get the least amount only as HBA.
HBA is also available for expansion of the existing house. Under this provision, employees can get 34 months of basic pay subject to a maximum of Rs 10 lakh, or the total cost of expansion up to Rs 10 lakh.
“The amount of advance shall be restricted to 80% of the true cost of the land and construction of house or cost expansion of living accommodation in the case of construction in rural areas. This can be relaxed and 100% can be sanctioned if the Head of the Department certifies that the concerned rural area falls within the periphery of town or city,” the HBA rules 2017 say.
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What the 7th Pay Commission recommended
As per the 7th Pay Commission recommendations, Central Government Employees are eligible to get the least of the following as House Building Advance (HBA):
- 34 times Basic Bay
- Rs 25 lakh or,
- anticipated price of house, whichever is least
The commission had recommended that the requirement of minimum of 10 years of continuous service to avail of HBA should be reduced to 5 years. Also, if both spouses are government servants, HBA should be admissible to both separately.
The commission further recommended that existing employees who have already taken Home Loans from banks and other financial institutions should also be allowed to migrate to this scheme.
