Housing and Urban Development Corporation (Hudco) has reduced interest rates by two per cent on loans for retail housing and urban infrastructure projects.
It has also increased the ceiling on loan amounts for retail financing to Rs 25 lakh from Rs 15 lakh.
The interest rate cut _ effective from February 1 _ will apply to projects undertaken by public agencies, joint sector initiatives as well as the private sector.
Announcing the rate reduction, Hudco chairman and managing director V Suresh said in New Delhi on Friday that the overall falling interest rate regime had led the institution to pass on the benefits to consumers.
Interest rates for housing project funding for middle income group (MIG) and high income group (HIG) categories, which earlier ranged between 15 and 16.5 per cent have now been brought down to 13.5 to 14 per cent depending on the repayment period of five to 15 years.
Interest rates applicable to projects related to utility and social infrastructure, waste management and land acquisition by public and joint sector agencies have also been brought down to 13.5-14 per cent from 15-16.5 per cent depending on the repayment period of 5-15 years. For commercial infrastructure schemes, the interest rates have been reduced by two per cent from 16.5 per cent to a band of 14.5-15 per cent. Even for private sector agencies interest rates for utility infrastructure projects have been kept at par with public sector agencies.
Interest rates for housing, commercial and other infrastructure have been reduced from 17-19.5 per cent to 15-15.5 per cent. For availing Hudco finance under line of credit for public sector agencies, rates of interest have been reduced from earlier 16.5 per cent to 13.5-14 per cent. For private sector agencies it has been reduced from 18 per cent to 15-15.5 per cent.
The rates for Police Housing and Government Rental Housing schemes have also been reduced from 14 per cent to 13 per cent.
On enhancing the loan ceiling for the Hudco Niwas scheme, Suresh said the decision follows an overwhelming response from retail segment. Hudco had sanctioned over Rs 758 crore for more than 1.57 lakh applicants.
He said the Hudco Niwas interest rates have also been reduced for loan slab of Rs 10-15 lakh. However, there is no interest rate cut for loans up to Rs 10 lakh. Hudco has also decided to provide individual loan facility to non-resident Indians (NRIs) up to Rs 50 lakh. Interest rates for the scheme have been kept at 13.5 per cent for loans up to Rs 15 lakh with repayment period of five years and 14 per cent for loans above Rs 15 lakh with repayment period up to 10 years.
Hudco has sanctioned total loan of Rs 6,873.22 crore by January 31, 2000 which is expected to cross Rs 7,700 crore by the end of this financial year, according to Suresh.
