NRI Home Loan

By: EconomyWatch Content   Date: 24 November 2009

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An NRI home loan is available for the construction of a new house/flat, purchase of a second hand house or alteration to an existing house. The NRI home loans are given to Non Resident Indians (NRIs) for buying, building or renovating homes that are meant for their occupation once they return to India.

 

Eligibility for NRI Home Loan

Every bank and housing finance company in India follows the RBI norm to define a Non Resident Indian (NRI) as an Indian citizen holding valid documents such as an Indian Passport and who stays abroad for employment or due to any other circumstances indicating an uncertain duration of stay abroad.

 

In addition, any of the government officials who have been posted abroad on duty or for any assignments with foreign governments or regional/national/international agencies are also entitled to these loans.

 

An NRI is eligible for a home loan, provided:

  • He/she is at least 21 years of age
  • a graduate

 

Interest rates on NRI Home Loans are marginally higher than the rates applicable on housing loans to resident Indians. The size of an NRI Home Loan depends on the borrower’s repaying capacity.

 

The borrowing capacity of an NRI is calculated on the basis of:

  • income
  • work experience
  • age
  • assets and liabilities
  • alternate employment prospects in India

Documents Required for an NRI Home Loan

Typically, NRIs live far away. So, Indian banks and lending agencies require them to provide some additional documents such as:

Ø      Copy of the passport and Visa
Ø      Copy of the appointment letter and the Employment Contract
Ø      The identity card of a person employed in the Middle East
Ø      Salary Certificate
Ø      Bank Statements for the past six months

 

In addition to the above, the following property related documents are required for submission for an NRI Home Loan.

 

Ø      Original title deeds tracing the title of the property
Ø      Agreement of sale or construction
Ø      Copy of NOC under the ULC Act
Ø      Approved construction plan or license
Ø      Latest tax paid receipts
Ø      Proof of investment of margin money through normal banking channels
Ø      Any other documents required by the lending agency

 

The repayment has to be routed through the NRE or NRO accounts of the Non Resident Indian who is taking the loan.

                                                  


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