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Presently, Developers/Builders, Housing Finance Companies (HFC) & National Housing Bank (NHB) can avail of ECB for financing low cost affordable housing under the Approval Route.
This circular has modified the guidelines as under: –
General
The aggregate limit for ECB under the low cost affordable housing scheme for the financial years 2013-14 and 2014-15 has been fixed at $1 billion per year. This limit will be reviewed thereafter.
Developers/Builders
i. Developers/builders must have at least 3 years’ experience in undertaking residential projects (as against the earlier requirement of 5 years’ experience) and must also have a good track record in terms of quality and delivery.
ii. The ECB availed of must be swapped into Rupees for the entire maturity on fully hedged basis.
National Housing Bank (NHB)
NHB must decide the interest rate spread after taking into account cost and other relevant factors. However, NHB has to ensure that interest rate spread for HFC for on-lending to prospective owners’ of individual units under the scheme is reasonable.
Housing Finance Companies (HFC)
Henceforth, HFC are required to have minimum Net Owned Funds (NoF) of Rs. 300 crore for the past three financial years only, as the condition requiring a minimum paid-up capital of not less than Rs. 50 crore, as per the latest audited balance sheet has been withdrawn by this circular. HFC while making the application for ECB must:
i. Submit a certificate from NHB that ECB is being availed for financing prospective owners of individual units for the low cost affordable housing.
ii. Ensure that the cost of such individual units does not exceed Rs. 30 lakh and loan amount does not exceed Rs. 25 lakh.
iii. Ensure that the units financed have a maximum carpet area of 60 square metres.
