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December 2008

Reverse Mortgage Scheme, 2008 — Notification No. 93/2008, dated 30-9-2008.

By Pinky Shah, Sonalee Godbole, Gaurang Gandhi, Chartered Accountants
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7 Reverse Mortgage Scheme, 2008 —
Notification No. 93/2008, dated 30-9-2008.


This scheme has been notified with effect from 1 April 2008.
The highlights of the scheme are as under :



  •  National Housing Board, scheduled bank and a registered housing company are
    defined as approved lending institutions.


  • Either a single individual or a couple of whom one of them is of sixty years
    of age or more can mortgage their residential house property located in India,
    with the approved lending institutions to obtain a loan, provided the house is
    owned and free from any encumbrance.


  • The approved lending institution would enter into a loan agreement with the
    person mortgaging his property.


  • The loan would be given either as periodic payments to be mutually decided or
    a lumpsum payment limited to 50% of the loan amount sanctioned.


  • The loan under reverse mortgage shall not be granted for more than 20 years
    from the date of the loan agreement.


  • In case of foreclosure of loan, the person or his legal heirs would be liable
    for repayment of principle amount of loan along with interest to the approved
    lending institution.


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