Government of India has been according considerable importance to the housing sector in rural areas. The housing sector is one of the prime engines of economic growth, as it satisfies the social needs, generates employment and stimulates economy with its spill-over effects. Housing in the rural areas both of agriculturists and non-agriculturists, combines the business as well as dwelling needs and thereby leads to overall rural development.

With a view to supplementing the efforts of Government of India, State Governments, National Housing Bank and Banking sector in augmenting the resources for the rural housing segment, NABARD has decided to include rural housing as an eligible activity for extension of refinance (investment credit) to the eligible banks w.e.f. 01 April 2001. The broad terms and conditions for its refinance scheme are :

Refinance will be provided to all eligible Banks for financing extended by them to housing projects in the 'rural' areas only. As per NABARD Act, Rural area means the area comprised in any village and includes the area comprised in any town, the population of which does not exceed 50000 or such other figure as the RBI may specify from time to time.

Refinance is available under Automatic Refinance Facility (ARF) subject to a ceiling of Rs. 5 lakh of loan amount per housing unit. Financing banks need to obtain prior sanction in respect of group proposals.

• Individuals

• Co-operative Housing Societies

• Public Bodies

• Housing Boards/ Housing Development Authorities/ Improvement Trusts

• Local Bodies

• Voluntary agencies and NGOs

• Housing Finance Companies registered with NHB

Financing made under Golden Jubilee Rural Housing Scheme and Schemes of the Govt. Of India, Ministry of Rural Development shall also be eligible for NABARD refinance.

Construction of New as well as Repairs/ Renovation of existing houses in rural areas.

As per RBI / NHB guidelines issued from time to time.

The cost of a dwelling unit may not exceed Rs.7.5 lakh. In case land is being acquired the land cost may be reckoned as margin money. Otherwise cost of land should not be included in the project cost.

• For new houses - Rs. 5 lakh

• For Repairs/ Renovation - Rs.1 lakh

• For new houses - not more than 15 years

• For Repairs/ Renovation - not more than 7 years

Not more than 18 months from the date of disbursement of first instalment.

As may be stipulated by NABARD from time to time. Interest rates at the ultimate borrower level will be as per the RBI norms.