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British government's Department for International Development will give National Housing Bank Rs 500-crore loan for financing construction of affordable houses in the country.
The project will begin with eight low-income states -- Rajasthan, Madhya Pradesh, Odisha, Uttar Pradesh, Bihar, West Bengal, Chhattisgarh and Jharkhand.
"The project will involve a DFID (Department for International Development) commitment of up to 50 million pounds (Rs 500 crore) over 2013-2019," National Housing Bank CMD R V Verma said at an event here.
He said the lending cost for affordable housing will be lower than normal rates. The project will also expand to other states in the future, he added.
The UK Minister of State for International Development Alan Duncan said the partnership will include investments in private sector projects designed to help the poor while generating a return.
"UK loans to small and medium developers will help build India's private sector, at least 17,000 low-income households. The project will also finance mortgages for low-income families," Duncan said.
The loan comprises two components, 40 million pounds (Rs 400 crore) as a concessional loan to the NHB to finance the construction of affordable housing units and loans to low income households and 10 million pounds (Rs 100 crore) as technical assistance, Verma said.
"We consider this a very valuable partnership and a very important project to tackle and address housing shortage with focus on low-income states," he added.
On asked about NHB's contribution for this affordable housing project, Verma said the bank may invest about Rs 500 crore or more.
"We are doing about Rs 14,000 crore in an year. And a large part of it, about 60% of it is for loans for up to Rs 15 lakh and 40% is for loans up to Rs 10 lakh," he said.
