Housing finance as a financial service is relatively new venture in India with a very quick growth in the sector.
In 1970, the Housing and Urban Development Corporation (HUDCO) was set up to finance housing and urban infrastructure activities followed by the Housing Development Finance Corporation (HDFC) in 1977, which was the first housing finance company in the private sector to be set up in India.
Currently there are 29 HFC’s approved for refinance assistance from National Housing Bank (NHB).
The following types of home loans are generally available in the market:
Home Equity Loans: This is a loan granted by keeping existing property on mortgage. The quantum of loan depends on the current market value of the property.
Home Extension Loans: This is a kind of home loan granted to do any kind of extension work for an existing house.
Home Improvement Loans: These loans are provided mainly for internal and external repairs and maintenance of existing houses like waterproofing and roofing, complete interior renovation, tiling and flooring etc.
Home Purchase Loans: Finance provided for the purchase of ready-made houses.
Land Purchase Loans: These loans are being provided for the purchase of land for the purpose of construction of residential houses.