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.
