Karnataka govt. is planning to revisit affordable housing scheme which offers subsidies on home loans and replace them with zero interest home loans. It is a part of the govt’s mission to support PM Modi’s Housing for All scheme. Karnataka Interest Free Home Loan Scheme is going to be launched for people in rural and urban areas. Under this scheme, govt. will revise the subsidies on home loans under certain specific conditions. In the mega Housing For All Scheme, the state govt. is planning to build around 19 lakh homes in next 2 and half years.
In Karnataka Interest Free Home Loan Scheme, state govt. will remove existing housing subsidies and pay the interest on the principal amount. In this scheme, govt. will pay 6.5% interest for home loans of upto Rs. 12 lakh in urban areas. Moreover for rural areas, govt. will pay 8% interest for home loans of upto Rs. 6 lakh. The state govt will bear the interest for a duration of 15 years (maximum loan tenure). After the revision in the home loan subsidies in Karnataka, people will just have to pay back their principal loan amount to the banks.
Karnataka Interest Free Home Loan Scheme 2022
The state govt. of Karnataka will revise current subsidies on home loans under various Housing Schemes in form of new interest-free home loans. Karnataka govt. will construct nearly 19 lakh houses over the next 30 months under Housing For All Scheme. Under new Home Loan Subsidy Scheme, govt. will pay interest on principal amount of upto Rs. 12 lakh for urban beneficiaries while Rs. 6 lakh for those in rural areas.
As per the revised Karnataka Interest Free Home Loan Scheme, beneficiaries are needed to only payback principal amount to banks. Karnataka govt. is going to handle interest expenses of housing loans for maximum loan tenure of 15 years. In this Interest Free Home Loan Scheme, govt. will pay an interest of 6.5% on Rs. 12 lakh loan in urban areas. Accordingly, govt. will pay an interest of 8% on Rs. 6 lakh loan in rural areas. The loans are going to be funded in 3 ways on the basis of the investing parties which are described below.
3 Models for Zero Interest Loans for Houses in Karnataka
The loans under Karnataka Interest Free Home Loan Scheme will be allowed under three models:-
- Under the first model, loans would be given by merging Rs 6 lakh from the central government and Rs 6 lakh from the state under Pradhan Mantri Awas Yojana (PMAY) in urban areas and Rs. 6 lakh in rural areas.
- In the second model, all the homes would be built in public-private partnership (PPP) model. The Karnataka state govt. and a private company will share sites on developed land and the beneficiaries will buy the constructed house or construct their own through an association made by them. If the beneficiary prefers to buy a constructed home which is more than the upper limit of the loan, then he/she has to pay the leftover amount.
- In the third model, private contractor would develop the land and hand over 50% share of the land to the government. The state govt. of Karnataka will then, in turn, will dispatch this land to the beneficiaries. The state govt has tried to increase the financial ability of beneficiaries for housing schemes to Rs. 3 lakh from the present Rs. 87,600 in urban areas and Rs. 32,000 in rural areas.
Any principal or interest above the given limit will have to be borne by the beneficiary. The houses will hold a carpet area ranging between 330 sq.ft and 450 sq.ft. Karnataka Housing Board, Karnataka Road Infrastructure Development Corporation, urban local bodies, Nirmithi Kendras and empaneled units will be the implementing agencies.
For more details, visit the official website of Karnataka Housing Board at https://khb.karnataka.gov.in/