7th CPC House Building Advance — CENTRAL GOVERNMENT EMPLOYEES NEWS

7th CPC HBA

House Building Advance (HBA) rules for Central Government Employees

The 7th Pay Commission House Building Advance is one of the most valuable benefit for Central Government employees. To buy a flat or built a house, the Central Government provides a bulk amount with lowest interest rate and also rebate available if certain restrictions are fulfilled.

7th CPC House Building Advance : There are tow major changes in ceiling limit as follows…

PC Advance
Recommended Ceiling	Recommendations
Rs. 50,000 or actual price of PC, whichever is lower	May be allowed maximum five times in the entire service.

HBA
Recommended Ceiling	Recommendations
34 times Basic Pay OR Rs. 25 lakh OR anticipated price of house, whichever is least	The requirement of minimum 10 years of continuous service to avail of HBA should be reduced to 5 years. If both spouses are government servants, HBA should be admissible to both separately. Existing employees who have already taken Home Loans from banks and other financial institutions should be allowed to migrate to this scheme.

House Building Advance 2017

The Government has revised the House Building Advance (HBA) rules for Central Government Employees incorporating the accepted recommendations of the 7th Pay Commission. Following are the salient features of the new rules:-

7th CPC : House Building Advance (HBA) rules 2018

The Government has modified the House Building Advance (HBA) rules for Central Government Employees as per the recommendations of the 7th Pay Commission. Following the points are new features of the new rules:-

The total amount of advance that a central government employee can borrow from government has been revised upwards. The employee can up to borrow 34 months of the basic pay subject to a maximum of Rs. 25 lakhs (Rs. Twenty Five Lakhs only), or cost of the house/flat, or the amount according to repaying capacity, whichever is the least for new construction/purchase of new house/flat. Earlier this limit was only Rs.7.50 lakhs.
Similarly, the HBA amount for expansion of the house has been revised to a maximum of Rs.10 lakhs or 34 months of basic pay or cost of the expansion of the house or amount according to repaying capacity, whichever is least. This amount was earlier Rs.1.80 lakhs.
The cost ceiling limit of the house which an employee can construct/ purchase has been revised to Rs.1.00 crore with a proviso of upward revision of 25% in deserving cases. The earlier cost ceiling limit was Rs.30 lakhs.
Both spouses, if they are central government employees, are now eligible to take HBA either jointly, or separately. Earlier only one spouse was eligible for House Building Advance.
There is a provision for individuals migrating from home loans taken from Financial Institutions/ Banks to HBA, if they so desire.
The provision for availing ‘second charge’ on the house for taking loans to fund balance amount from Banks/ Financial Institutions has been simplified considerably. ‘No Objection Certificate’ will be issued along with sanction order of HBA, on employee’s declaration.
Henceforth, the rate of Interest on Housing Building Advance shall be at only one rate of 8.50% at simple interest (in place of the earlier four slabs of bearing interest rates ranging from 6% to 9.50% for different slabs of HBA which ranged from Rs.50,000/- to Rs.7,50,000/-) .
This rate of interest shall be reviewed every three years. All cases of subsequent tranches/ installments of HBA being taken by the employee in different financial years shall be governed by the applicable rate of interest in the year in which the HBA was sanctioned, in the event of change in the rate of interest. HBA is admissible to an employee only once in a life time.
The clause of adding a higher rate of interest at 2.5% (two point five percent) above the prescribed rate during sanction of House Building Advance stands withdrawn. Earlier the employee was sanctioned an advance at an interest rate of 2.5% above the scheduled rates with the stipulation that if conditions attached to the sanction including those relating to the recovery of amount are fulfilled completely, to the satisfaction of the competent authority, a rebate of interest to the extent of 2.5% was allowed.
The methodology of recovery of HBA shall continue as per the existing pattern recovery of principal first in the first fifteen years in 180 monthly instalments and interest thereafter in next five years in 60 monthly instalments.
The house/flat constructed/purchased with the help of House Building advance can be insured with the private insurance companies which are approved by Insurance Regulatory Development Authority (IRDA).
This attractive package is expected to incentivize the government employee to buy house/ flat by taking the revised HBA along with other bank loans, if required. This will give a fillip to the Housing infrastructure sector. [click to read more…]

Top Developments on 7th CPC HBA

Central Government Employees News Latest Update – Top 5 Recent Developments October 7, 2019 Read more...
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HBA for CG employees at affordable rate of interest September 16, 2019 Read more...
Festival Advance Increased to Civil and Teacher Pensioners August 7, 2019 Read more...
7th CPC House Building Advance – Loan Migration – CGDA November 20, 2018 Read more...
7th CPC House Building Advance Rules (HBA) – Partial Modification August 8, 2018 Read more...
7th CPC HBA – Amendment to Rules on House Building Advance May 14, 2018 Read more...
Migration of Home Loan to Revised HBA – Ministry of Housing & Urban Affairs February 12, 2018 Read more...
HBA Interest Rebate as per the recommendations of 7th CPC February 12, 2018 Read more...
7th CPC HBA : House Building Advance Rules 2017 November 13, 2017 Read more...
Abolition of Advance of Leave Salary as per 7th CPC Recommendations April 5, 2017 Read more...
Loans and Advances by the Central Government – Interest rates and other terms and conditions January 24, 2017 Read more...
Letter of CCGGOO to the Finance Secretary, GOI for cash disbursement to officers November 21, 2016 Read more...
Rs.10000 Advance in the form of Cash Payout to Central Government employees on 23.11.2016 November 17, 2016 Read more...
Personal Computer Advance for all Central Government Employees – Finmin Orders October 7, 2016 Read more...
Advances for Medical Treatment, TA on Tour or Transfer and LTC are retained – Finmin Orders October 7, 2016 Read more...
Interest rates for Loans and Advances by the Central Government – Finmin Orders February 6, 2016 Read more...
Advances to Central Govt Employees : Rate of Interest during 2015-16 February 6, 2016 Read more...
Abolishing 12 Interest free advances including LTC Advance recommended by 7th CPC November 26, 2015 Read more...
Advances to Government servants — Rate of interest for purchase of conveyances during 2013-2014. November 19, 2013 Read more...

How to Calculate Interest for HBA?

Simple interest calculation is followed for HBA. The amount of interest is determined depends upon the outstanding balance on the last day of month. The interest rates are applicable from 6% to 9.5% according to the loan amount. [Click to view detailed interest calculation with example]