In a boost to affordable housing, the housing finance companies ( HFCs) have called for overhauling the Credit Risk Guarantee Fund Trust for Low Income Housing (CRGFTLIH) to ensure higher guarantee cover for home loans up to Rs 25 lakh.
Currently, the scope of CRGFTLIH is very limited as a credit risk guarantee fund is provided to lending institutions against their housing loans up to Rs 5 lakh granted to urban borrowers of economically weaker sections having low income without requiring any collateral security and a third party guarantee.
Because of its limited scope,this credit risk guarantee scheme was of hardly any use to home loan borrowers belonging to the economically weaker section. The present scheme provides up to 90% guarantee for home loans up to Rs 2 lakhs and up to 85% for loan amounts of Rs 2-5 lakh. HFCs have asked for extending the benefit beyond home loans of up to Rs 5 lakh to Rs 25 lakh to bring a large number of low-cost home buyers under the ambit of the scheme. HFCs have also recommended a 50-75 basis points guarantee cover fee to be borne by mortgage lenders.
Presently , the government is looking into the suggestions made by HFCs. If this scheme is revamped as per their proposal, it will not just supplement PMAY which provides interest subsidy to first time home buyers of low cost homes, it will give a boost to affordable housing which is currently at crossroads due to unaffordable home prices and high home loan rates
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