NHB to aid banks for the scheme

National Housing Bank will be refinancing the banks and housing finance companies (HFCs) to extend reverse mortgage loans to senior citizens.

It will also furnish guarantee for the obligations of banks/HFCs to make regular payment over the expected period to the senior citizen borrowers.

This would provide comfort to senior citizens who are mortgaging their house upfront to receive payments over the period.

Speaking at a reverse mortgage seminar organised by NHB and Harmony for Silvers Foundation, S Shridhar, NHB chairman, said, "We decided to provide guarantees because senior citizens' organisations had raised concerns about lenders defaulting on their obligations before designing the reverse mortgage scheme," said Shridhar.

"During the loan, if something happens to the borrower, NHB will make good the payments to the bank," he added.

NHB will be launching counselling centres, beginning with its branch office in Delhi on reverse mortgage.

Shridhar said that in July last year, NHB had held talks with IRDA and insurance companies to combine the reverse mortgage loan with an insurance plan, which will provide an annuity to the senior citizen after the loan tenure of 15 years are over.