CHAPTER 1

INTRODUCTION
1.1 Overview
Housing is one of the fundamental demands for living. Access to
acceptable housing is one of the elementary human needs as well as one of the keys
to peace and happiness. In every country, resolving housing issues has political,
social and economic significance. To solve housing issues, every country has
formulated its own specific housing development program and developed its unique
program operating mechanisms.
Many countries have especially drawn up the development program of public
housing to assist low and middle-income groups solve their particular housingrelated issues. During the last one decade, Asia Pacific economies have made
significant progress in developing private housing market and market based
systems for financing home purchases. Government sponsored housing finance
strategies have become more and more non-viable due to budget constraints. Post
1997, Asian financial crisis, the respective Governments in Asia stepped up their
effort to improve the structure of the housing finance system. Many countries even
in other parts of the globe have experienced the waves of financial liberalization
and deregulation.
House prices have increased in most industrialised and emerging economics
and in many countries housing debt per capita and house prices have reached new
all-time highs (BIS, 2006).The key factors triggering the progressive growth on the
demand side are declining interest rates over a period of years, rapid increasing in
income levels, tax benefits extended to borrowers whereas from the supply side the
emerging competition in the housing finance sector between lenders, an increasing
number of new entrants to the housing finance market.
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1.2 Global Trends in Housing and Housing Finance Markets

Housing is an integral measure of a countrys development, and the way a
society housesits people is an important determinant of its development and
progress (Parekh, D, 2006).Housing has traditionally been one of the most
important assets for households in Asia(Haibin Zhu, 2006). Now, let us have a look
at the evolution and trends in housing and housing finance markets in selected
countries
Loans for Housing
Realising the necessity to provide houses and improve housing facilities in the
country, the nationalised banks have been asked to provide funds for housing since
1979. Initially, they were expected to lend Rs.150 crores annually, but the target
was raised to Rs.300 crores for the year 1989-90. For the year 1990-91, individual
nationalised banks housing finance allocation was required to be computed at 1.5%
of the incremental deposits on March 1990, over the corresponding figure of March
1989.According to the guidelines issued by the Reserve Bank, a banks assistance
to the housing sector (including rural areas) may be as follows:
1. 30% of the total housing finance allocation by way of direct assistance to
individuals or a group of borrowers etc., out of which at least half should be given
as direct housing loans in rural and semi-urban areas.
2. 30%of the allocation for landing to HUDCO, Housing Development Boards, HDFC
and other housing agencies for construction of house. The remaining 40% of the
assistance may be by way of subscription to the guaranteed bonds/ debentures of
HUDCO, and National Housing Bank.
3. The loan can be used for purchase of a house or flat, construction of a house or
tenement or for additions or extensions to an existing structure.

1.3

Objectives
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To provide long term finance for construction of houses for residential

purposes or finance or undertake housing and urban development programmes in
the country.
To finance or undertake, wholly or partly, the setting up of new or
satellite town.
To subscribe to the debentures and bonds to be issued by the State
Housing (and or Urban Development) Boards, Improvement Trusts,
Development Authorities etc., specifically for the purpose of financing
housing and urban development programs.
To finance or undertake the setting up of industrial enterprises of
building material.
To administer the moneys received, from time to time, from the
Government of India and other sources as grants or otherwise for the
purposes of financing or undertaking housing and urban development
programmes in the country.
To promote, establish, assist, collaborate and provide consultancy
services for the projects of designing and planning of works relating to
Housing and Urban Development programs in India and abroad.

1.4 Need for Housing Loan

Housing is one of the basic needs of mankind in terms of safety, security,
self-esteem, social status, cultural identity, satisfaction and achievement. It is
fundamental requirement both for human existence and settlement. Housing
contributes effectively in fixed capital formation as well as creation of productive
employment. It plays an important role in countrys economy, typically accounting
for around 10 to 20 per cent of total economic activity. It has been estimated that
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there are around 600 other industries that have links to the housing markets. A
stimulus to the demand for housing will have a direct or indirect stimulatory impact
on all of these industries.

For every rupee invested in India, INR 0.78 is added to the gross domestic
product. Since independence, growth in the Indian population has aggravated the
problem of housing for Indian citizens. According to the population census of 2001,
out of the total population 1027 million about 742 million live in rural areas and
285 million live in urban areas. Urban population is accounted as 27.8% to the total
population whereas it was 25.7% under 1991 census. So there is rise of 2.1% in the
urbanization of Indian population. This has also brought along with it
disproportionately higher demand for housing be it for upper class, middle class
and for low income category of population.

Despite the growth of housing markets in India, for example, the current
housing shortage was estimated to be over 22 million dwelling units between 2002
and 2007. The provision of finance for the purchase of residential housing is, or
should be, an important part of any societys financial structure. Compared to a
households average income, the purchase of a housing unit is a large investment
in many cases it is in fact a households biggest lifetime investment.

CHAPTER 2
HOUSING LOAN: A CHANGED SCENARIO

2.1 Housing Loan: A Changed Scenario

Traditionally in India, most people used to depend on their savings while
considering buying a home. Provident fund and gratuity amounts received after
retirement were the major sources of finance for employed or retired people looking
for owning houses. However, with the emergence of housing finance as a major
business in the country, an increasingly large number of people are going in for
home loans. Earlier it was considered socially unviable to borrow funds. Theres
been an evident shift in perception and mind set in the Indian middle class over the
last 5 to 10 years, thanks to the impact of liberalization and opening up of the
Indian economy, a rise in the average income across households, and a palpable
desire to own things now.
The present generation is more ambitious than the previous ones cannot be
disrupted. Perhaps, it is that ambition which drives young people to buy a house,
here is sea change in the Indian families. Indians are shifting from joint family
concept to nuclear family concept. Incomes of families are rising and their
purchasing capacities as well as loan repaying capacities are going up. Earlier a
large number of borrowers used to be in their late 30s or early 40s but today
greater numbers of borrowers are in their mid 30s. This change eventually brings
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more demand for housing finance. These projections suggest that demographic
growth in Indias large cities will be high, partly due to population growth and
partly due to immigration. These are some of the indications that signal bright
future of housing finance industry which is currently facing tough times due to the
ongoing economic recession.
The major focus of government policies until 1970 was on agriculture and
industry and housing was not the priority sector. In the 1970s, a network of
housing boards at state level was incorporated with the Housing Urban
Development Corporation (HUDCO) acting as an apex body, providing finance and
technical support to these boards. After the initiation of the liberalization process in
India, the government has taken number of measures to promote housing from the
formal sector and share the task of providing housing finance with the private
sector.
Incorporation of National Housing Bank (NHB) in the year 1987 as the
controlling body to formalize housing finance was one of the remarkable steps in
this direction. Housing finance has emerged as a growth sector these days expected
to grow at a phenomenal 39% PA. As per the estimates of NHB housing finance
market was 45000 crores during the year 2003-04 and had reached at more than
80,000 crores till the end of 2006. Banks and financial institutions have brought sea
changes in their strategies and there is clear shift from sellers market to buyers
market. Liberal tax incentives by the government coupled with low and competitive
interest rates has made this sector a high growth sector.

2.2 Documentation Required

Applying for a Housing Loan:
While submitting the application form for a home loan, lenders ask for documents
to establish the applicants income.
This is backed up by a proof like copies of last three years INCOME TAX
returns (along with the copies of computation of income/annual accounts, if any),
Form 16 or Form 16A, last three month's salary slips of the applicant, copies of the
last 6 month's statements of all active bank accounts in which applicants salary or
business income details are reflected, etc.

For self-employed people, if the income has increased dramatically in the past year,
it is advisable that the applicant should have his/her explanation ready as to why
they think this is a permanent increase in their income, rather than just a one-time
aberration which may decrease in near future. The reason for this is that if the
lender is convinced with the applicants explanation, then the loan eligibility can be
considered in relation to the latest income rather than considering the much lower
average income.

For salaried employees, if the income has increased since the last financial year
as shown in their latest salary slips, such increased salary is taken into account for
loan eligibility purposes.

2.3 Applicants Bank Statements

Level of activity: In case of self-employed people, this gives a good idea about
the extent of his or her business activities.
Average bank balance: A look at the average bank balances maintained in a
savings bank account speaks a lot about the spending or saving habits of an
individual.
Cheque returns: A small charge debited by the applicants bank in the
statement indicates that a cheque issued by him or her was returned by the bank.
Too many of such returns can have a negative impact on a loan sanction
Cheque bounces: If cheques deposited by the applicants are returned by the
issuer's bank, they will be visible in the bank statement. All Banks have specific
norms as to how many such returns are acceptable in a period of 1 year.
Periodic payments: The existence of periodic payments to other finance
companies or bank etc indicates an existing liability and the applicant will needs to
provide full details of these liabilities to the lender.
Age proof: Applicants age proof have to be submitted such as school leaving
certificate/driving license/passport/ration card/PAN card/election commission's
card/etc.
Address proof: Similar documents.

Identification proof: Same as above, but with photographs. Sometimes, the

same document, if it contains a photograph, the current residential address and the
correct age can be proof for all 3 things.
Applicants employment details: If the applicants employer is not wellknown, then a short summary about the nature of the company, its business lines, its
main customers, its competitors, number of offices, number of employees, turnover,
profit, etc is needed. Usually, the company profile that is available on the standard
website of the company is enough.
Applicants investments: This helps the bank to estimate the applicants ability
to pay the down payment as well as his or her saving habits.

2.4 Information Resource for Housing Loans in India

For many millions of Indians, the single greatest achievement in life was
to own a home, and thanks to a range of banking services now available, home
loans are a simple affair now. In fact, home loans are now sold as a product and the
applicant is treated like a customer. Gone are the days when ordinary folk depended
on a lifetime of savings and resorted to the local moneylender to build or buy a
house. Home loans make it possible to move into your own home, almost as soon
as you can afford the down-payment and keep paying for it while you also live in it.
But the home loan is actually a mortgage and you could lose the home in case you
are not able to pay it. Most banks have standard guidelines for applying for a home
loan and a set of rules, which may vary, from one finance institution from the other.
The term of the loan may range from one year to thirty years, with varying
interest rates. The longer the term, the higher the interest charged, usually.
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However, having decided on a longer term, a pre-payment of the loan also leads to
pre-payment penalty- which usually ranges from one to two per cent.
For instance, most home loan applicants have to be between twenty-one and
fifty-eight years of age, or at least the guarantor has to be. There may be age limit
extensions of government employees or self-employed people who will not be
forced to retire at sixty.

CHAPTER 3
NATIONAL HOUSING BANK
3.1 Role of National Housing Bank
The National Housing Bank (NHB) was set up in July 1988, under an Act of the
Parliament. NHB was conceived and promoted to function as the apex institution in
the housing sector and is wholly owned by the Reserve Bank of India. NHBs
principal mandate has been to establish a network of housing finance outlets across
the vast expanse of the nation to serve different income and social groups in
different regions. The purpose of setting up more local and regional level
specialized institutions is to have dedicated outlets for supply of housing credit.
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The need to set up this institution as the apex body stemmed from various factors.
Most prominent amongst them was the acute shortage of funds confronting the
housing sector and the resulting serious gap in housing supply. Absence of
specialized and mature housing finance system resulted in inadequate finance for
both individual loans and delivery of buildable/serviced land, building materials,
cost-effective technologies and other related know-how. With the setting up of
NHB in 1988, there has been a sustained effort at creating and supporting new set
of specialized institutions to serve as dedicated centers for housing credit.

3.2 Objectives of National Housing Banks

To promote a sound, healthy, viable and efficient housing finance system to

cater to all segments of the population.

To establish a network of housing finance outlets to adequately serve different

regions and different income groups.

To promote savings for housing.

To promote appropriate technologies for housing.

To strengthen the backward and forward linkages of the housing sector with rest
of the economy.

To augment the financial resources for the sector.

3.3 Functions of National Housing Banks

The activities of NHB can be broadly divided into following three categories:
Promotion & Development
Intervention through institutional credit can be made more effective by adoption
of different approaches to cater to the needs of different income groups. With the
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setting up of NHB in 1988, there have been sustained efforts at creating and
supporting new set of specialized institutions to serve as dedicated centers for
housing credit. NHBs role in this regard can be measured from the growth of
specialized institutions spread over the vast span of the country.
Regulatory Function
The second important function of NHB is the regulatory role assigned to it. The
objective is to create the framework for an effective system of responsive
regulation in tandem with the free market approach which would promote the
credibility of the housing finance system among the savers and investors.
Financial Function
The third important role of NHB is to provide financial assistance to the various
banks and housing finance institutions. As an apex refinance institution, the
principal focus of NHBs program is to generate large scale involvement of primary
lending institutions falling in various categories to serve as dedicated outlets for
assistance to the housing sector. These institutions include scheduled banks (both
commercial and cooperative), regional rural banks, specialized housing finance
institutions, Agriculture and Rural Development Banks and the Apex cooperative
housing finance societies. The National Housing Bank (NHB) has formulated a
special Rural Housing Finance Scheme to mark the Golden Jubilee of Indian
Independence.

3.4 Institutions Providing Housing Finance

In India, the following types of institutions provide long-term finance for
housing:
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Commercial banks;

Cooperative banks;

Housing finance companies;

Regional rural banks;

Agriculture and rural development banks; and

Cooperative housing finance societies

The commercial banks are the largest mobilizer of savings in the country. In
terms of coverage also, the banking system has the largest branch network.
However, in the past, the savings mobilized were not being ploughed back to the
households for shelter purposes. The reluctance on the part of the banks to extend
credit for housing as a regular part of their business was basically due to their
perceived role being limited to financing of working capital needs of commerce,
industry and trade. Yet another factor was that the banks did not want to tie up their
short resources in extending long-term housing loans.
.

Issues in the Development of the Housing Finance Sector

The major issue in the development of the housing sector is the availability of
long-term resources. One such source is mortgage securitization, which is still at a
nascent stage in India. Although NHB in association with some HFCs like, Can Fin
Home has effected securitization of mortgage loans in various trenches, a lot of
ground is left to be covered. The constraints arise from some legal issues, taxation
matters and the regulatory environment.
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As mortgage debt is regarded as related to immovable property, its transfer can

only be affected by means of an instrument in writing, which requires payment of
stamp duty for the instrument to be valid. The stamp duty on conveyance ranges
from 3% to 15% of the consideration for transfer in different states.
Further, only a registered instrument can transfer such mortgage debt. As
securitization envisages pooling of mortgages originated by housing finance
institutions in different states, the requirement of registration not only makes the
transaction too costly to be financially viable but also makes it impractical.
Some of the state governments have realized the importance of mortgage
backed securitization and have reduced the stamp duty payable on the instrument of
securitization to 0.1%. A few others are expected to follow.

CHAPTER 4
LOANS OFFERED BY PROMINENT HFCS

4.1 Overview of Housing Loans Offered by Prominent HFCs

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Most of the institutions today offer quite a variety of housing loans to prospective
borrowers.
Loans can be availed for the following purposes:
Purchase house/ flat.
Construction of house/ flat.

Extend, repair, renovate or alter a house/ flat.

Purchase a plot of land meant for construction of a dwelling unit

Interest rate options:

The borrower has an option of availing the loan either at a fixed rate of interest, which
stays constant throughout the loan period, or at a floating rate of interest where the
interest changes (increases or decreases) depending on changes in the Bank's Term
Lending Rate.
LTV is the percentage of the value of property that the lender will provide. The
remaining value of the property will be the owners contribution (also called the margin).
The usual
LTV values are as shown but differ from one HFC to another.
85% for new house/ flat
85% for old house/ flat
85% for purchase of a plot of land alone
20% for repairs and renovation

Loan amounts

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Most lenders are offering loans in the range of 10 million rupees but some go higher.
Detailed description of each loan appears in the schedules comparing loans offered by
major HFCs.

Tenure of loans
Loan terms vary from 5, 10, 15 years generally. Some HFCs are offering adjustable
rate loans up to 20 or even 30 years.

Repayment:
The borrowers repay the loan in Equated Monthly Installments (EMIs)
comprising principal and interest. Repayment by way of EMI commences from the
month following the month in which you take full disbursement.

Eligibility and repayment capacity

You can avail a loan if you are 21 years or older and have a steady source of income.
Repayment capacity takes into consideration factors such as income, age, qualifications,
number of dependants, spouse's income, assets, liabilities, stability and continuity of
occupation and savings history

4.2 Trends in Housing Finance Sector

Housing finance stands tall in the financial sector today. Over the last four
years, the business has added story upon story on safe foundations. This has
attracted new entrants.
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The pace of this growth begs questions.

Will the business continue to grow at the same rate over the next few years?
Will the risk related to lending increase?
How will the increased interest of commercial banks and the entry of new
competition impact the housing finance market?

4.3 Mortgage Guarantee

National Housing Bank (NHB) is in the process of setting up a mortgage
guarantee company in association with some foreign housing finance firms with a
view to encourage housing loans for the "non-salary informal class of the society".
The company was expected to be formed by the end of this year and would become
operational early next year.
The non-formal sector, which is a major chunk of the Indian housing loan
market, has not yet been seriously addressed by banks or housing finance
companies due to the gravity of the risks involved compared to the salaried sector.

Scheme for Guaranteeing Bonds of HFCs

Housing Finance companies depend to a great extent on refinance assistance
from NHB. However, the extension of refinance assistance by NHB is constrained
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by various factors like NHB's own NOF, HFCs' borrowing power etc. In addition,
in the present liberalized environment, the HFCs prefer to raise resources directly
from market in order to eliminate the cost of intermediation. Besides NHB
refinance, HFCs mainly depend upon term loans from banks and public deposits.
Of late, the maturity profile of public deposits has been shortening leading to asset
liability mismatches for HFCs. One way to overcome this problem is floatation of
bonds/debentures having a longer maturity period of say five to seven years. To
attract the investors at competitively low rates, such bonds/debentures should have
sufficiently high rating. Many of the HFCs have not been able to float
bonds/debentures because of the lower credit rating from the rating agencies for
various reasons including the inherent mismatch between assets and liabilities.
NHB's intervention in this area was considered critical and accordingly a scheme
was introduced to extend guarantee to the bonds/ debentures to be floated by HFCs
meeting certain laid down criteria. Under the scheme, NHB will provide top ended
guarantee relating to the repayment of principal and interest which will provide
necessary credit enhancement and will enable HFCs to acquire higher credit rating
leading to competitive pricing of these instruments. The salient features of the
scheme are as under:

CASE STUDY

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Introducing HUDCO
Housing and construction have been regarded as the engine of the economy on
account of their inherent potential to kick starts the economy. Apart from being a
basic human need, housing functions as the catalyst for the development of
concomitant infrastructure and stimulates the growth of secondary and tertiary
sectors. This is on account of the intrinsic chain of backward and forward linkages
with other sectors of the economy, fuelling growth of ancillary industries such as
cement, steel, brick and tiles, building material, paints and finishes etc. besides
triggering off the demand for consumer goods as well as supporting services.
Empirical evidence has established that along with the significant contribution to
the national income and gap, housing is one of the largest employment generators
in India.

Incorporated on 25 April 1970, HUDCO was an expression of the concern of the

central government in regard to the deteriorating housing conditions in the country
and a desire to assist various agencies in dealing with it in a positive manner. The
principal mandate of HUDCO was to ameliorate the housing conditions of all
groups with a thrust to the needs of low-income group (LIG) and economically
weaker sections (EWS). HUDCO today has emerged as the leading national technofinancing institution with a major objective today of financing/encouraging the
housing activity in the country and alleviating housing shortage of all groups in
rural and urban areas and the development of urban infrastructure of various shades
in human settlements.

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Resource Mobilization
HUDCO was established with an equity base of Rs.2 crore. Over the years, the
Government has expanded the equity base. The present authorized capital base
of HUDCO is Rs.2500 crore and paid-up capital is Rs.2001.9 crore (as on March
31, 2009). HUDCO has created a reserve of Rs.2, 665.96 crore as on 31st March
2009. The net worth of HUDCO is Rs.4, 647.46 crore. Over the years, HUDCO
has further been able to mobilise resource from institutional agencies like LIC,
GIC, UTI Banking Sector, International Assistance (Kfw, JBIC, ODA, ADB,
USAID etc.) and market borrowings through debentures, taxable and tax-free
bonds as well as through public deposits taking the overall borrowing to
Rs.19,249.32 crore

Programs
In order to realize the objectives for which it was established HUDCO has
implemented a variety of schemes for shelter and services, thereby improving the
living conditions of the people.
Apart from financing housing schemes HUDCO is also contributing to improve the
quality of life by augmenting basic community facilities and infrastructure services.
Projects involving self-help by the beneficiaries are promoted by encouraging sites
and services schemes, core housing, skeletal housing, shelter up gradation and so
forth. In order to provide basic facilities in the existing houses where adequate
sanitary disposal systems are not available, financial assistance for basic sanitation
schemes is being extended on liberalized terms.
HUDCO extends assistance benefiting the masses on urban and rural areas under a
broad spectrum of programs as listed below.
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Housing

Urban housing
Rural housing
Staff rental housing
Repairs and renewals
Shelter and sanitation facilities for foot path dwellers in urban areas (night
shelter, pay and use toilettes)
Working women ownership condominium housing
Housing through NGOs/ CBO's;
Housing through private builders/joint sector
Land acquisition

Infrastructure

Integrated land acquisition and development

Basic sanitation
Environmental improvement of slums
Utility infrastructure
Social infrastructure
Economic and commercial Infrastructure

Building Technology

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 Building centres for technology transfer at the grass roots

Building material industries

Consultancy Services
Consultancy in housing, urban development and infrastructure

Research and Training

Capacity building and technical assistance to all borrowing agencies
Research and training in human settlements.

HUDCO Niwas

To provide housing finance to resident and non-resident Indians, HUDCO launched

its retail finance window on Mar 1999. Ever since its launch it has received
overwhelming response for it most competitive interest rates coupled with a broad
based user friendly
options and value added service as a part of its scheme. Loan is provided for
construction or purchase of house/flat; for purchase of plot from public agencies
and for extension or improvements on existing house.
Interest calculated on monthly reducing balance
Waiver of last two months instalments if all earlier instalment are paid on
time
Free personal accident insurance and insurance of borrowers house against
fire and natural calamities.
Low processing and administrative charges further reduction for armed/Para
military/ police forces personnel, widow or physically challenged persons.
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 No prepayment penalties
Free counselling to alternate building technologies
Free counselling on designing the house.

Urban Infrastructure

HUDCO has also been entrusted the responsibility to fianc urban infrastructure
projects. For this, the ministry of urban development and poverty alleviation, govt.
of India up to the year 2002-2003, provided additional equity support of Rs.188.50
crores.
HUDCO has so far sanctioned loan off Rs. 20526 crores for 1933 urban
infrastructure projects. These cover sectors of water supply, sewerage, and
drainage, sold waste management, road/bridges. Transport nagar/terminal, airports,
social infrastructure, area development projects, commercial complexes, integrated
low cost sanitation and basic sanitation schemes.

The HUDCO Vision -2012

To emerge as the market leader by consolidating and elevating HUDCO image in
the area of housing and urban loan infrastructure finance through market orientation
involving public private and peoples participation and wider coverage of market
both by way of reaching out the new segments and diversifying into related areas to
provide new services; while keeping its social Commitments and promoting
appropriated building technologies by means of a competent motivated, efficient
workforce.

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The corporate plan 2010 envisages the formation of independent and synergetic
cells or empowered groups on the area of strategy planning. Business development,
asset liability management, risk management, Consultancy management,
organizational systems and estate development to ensure sustained business growth
besides exploring new avenues of diversification.

The stress is on expansion of lending to housing and urban infrastructure, housing

deliver through expanded avenues including retail financing, increased Consultancy
assistance for projects in India and abroad, impetus to building technology trader
initiatives and in house research and training programs with national/international
networking.

Introducing HUDCO Niwas

The HUDCO NIWAS scheme emerging as a popular individual home loan-lending
window continued to elicit an overwhelming response. Ever since the launch of the
scheme in March 1999, it has benefited over 3.32 lakh families with a total sanction
of
Rs 2692.16 crores and disbursement of Rs.2475.64 crores.
During the year 2009-10 alone, an amount of Rs. 464. 03 crores have been
sanctioned from 75296 applicants, besides accounting for a release of over Rs.
1006.73 crores.
As part of its objective to reach its beneficiaries directly, HUDCO is offering
financial assistance to individual families to enable them to acquire a home of their
own through its HUDCO NIWAS scheme.

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HUDCO NIWAS offers the following schemes:

Individual housing finance scheme for resident Indians

Individual housing finance scheme for non-resident Indians
Bulk loans to govt. and public sector undertaking for HBA to their employees

HUDCO NIWAS offers loan assistant to/for:

a) Construct a house/buy a house or flat;
b) Extend or improve the existing house or flat
c) Purchase a plot from public agencies/co-op societies of government
employees/reputed developers.
d) Registration of existing house including conversion from leasehold to free
hold
e) Refinancing of existing housing loans taken from other institutions
f) Loan to professionals for non residential premises;
g) Loan against residential property

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CONCLUSION

In the conclusion I would like to say that it was a very informative project. If
you are wanting buying a home or refinancing your mortgage loan, you should be
further attentive not to make large purchases on credit cards before your application
until closing the mortgage refinancing or new home loan. Credit score companies
might be slow in entering new activities into your history. So you may just scrape
pass the credit score search first time round. Nevertheless, as the new spending
begins appearing in your credit report, your rating may go down to a level that is
not agreeable any longer.
This project would rather help you a lot if you are planning to buy a home
loan. It has all the details needed to know when you are going for a home loan. It is
very important for us to decide whether we are taking the loan on fixed or floating
intrest. Information regarding the various types of intrest is given in this project.
HOME SWEET HOME it is very important to have a home to live in. thus I
conclude be wise before taking a home loan. This project would make you wiser
26

after you hve read it. And the interest rates given in the project are of 2010 and are
subject to change.
The risk management process involves identification of the risks, deciding the
appropriate exposure level to the risks and developing the strategies to manage the
risk. Asset Liability Management is one such tool for managing the risks. NHB has
recently issued the guidelines for putting in place a system of Asset Liability
Management in HFCs and these guidelines are to be made operational with effect
from the current year. Any risk management system requires data, which are
accurate and available on time. Thus efforts should be made to capture the data
from the various branches on time.

BIBLOGRAPHY
Website:
1. www.Deals4Lons.com
2. www.bankbazar.com
3. www.wikipedia.com

Books:
1. NHB-report on trend and progress in housing

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