Centre to provide Rs 5000-crore assistance to states for affordable housing

27 Feb 2009 | 10:32 Centre to provide Rs 5000-crore assistance to states for affordable housing

The Cabinet Committee on Economic Affairs (CCEA) on Thursday, 26 February 2009, approved a scheme to encourage states to increase the supply of land and construct 10 lakh affordable houses. The Centre will provide finance assistance of Rs 5000 crore over the next four years for the affordable housing projects.

The scheme is expected to activate the measures announced for the housing construction sector under the economic stimulus packages, the government said. It will increase the stock of houses ranging from 300 square feet (sq.ft) to 1200 sq.ft plinth area built at affordable rates on land provided by state governments, it said.

Construction and development is envisaged in public-private partnership (PPP) mode. Private Sector developers and builders as well as state housing boards are expected to be partners to the government and construct and develop projects with funding from institutional sources. Real estate developers looking to affordable housing during the downturn will now have an opportunity to take up projects where demand for housing is still high, a release by the government after the CCEA meeting said. The urban housing shortage is estimated at 24.7 million, largely for the weaker and low income households.

The Centre will share costs on external civic infrastructure and connectivity for such projects on a reimbursement basis.

The pace of applications for home loans at reduced interest at the rate of 8% to 8.5% for loans upto Rs.5 lakhs and at 9.25% for loans upto Rs.20 lakhs can now be expected to increase.

A minimum of 25% houses of 300 sq.ft will be compulsory for EWS and weaker sections and the urban poor, in each project to be allotted by the government.

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