Home Loan for NRI

Home loan provisions for NRI’s :

Broadly categorized, NRI’s who are liable to home loans in India are:

1. A citizen of India who holds valid documents such as Indian passport and lives abroad for employment purposes or even for carrying out business or vocation abroad or stays outside India that indicates his/her intention for an uncertain period.
2. Government employees who are sent outside India for accomplishment of Indian missions & other similar agencies established abroad by Indian government wherein officials draw salaries from resources of India.
3. Indian officials who are deputed abroad for assignments with International agencies or governments such as International Monetary Fund (IMF), World Bank, Economic and Social Commission for Asia and the Pacific (ESCAP) and World Health Organization (WHO).
4. Officials of Public Sector Undertakings or State Government who are deputed outside India on temporary assignments. Apart from this, the officials who are posted in branches abroad.

Factors involved :

Under subsequent housing finances schemes, home loans are sanctioned to NRI’s:

• Purchase of a ready-built house, from second owner or a house under construction
• For self-construction on plot of land
• For revamping or improvement of existing property(India)
• To generate finance for purchasing a plot of land that is allotted by a development authority or society.

Eligibility :

Eligibility for NRI’s is calculated in the similar way as it is estimated for Indian residents. Major emphasis is laid on the criteria in an appraisal of NRI case:

• Qualifications: NRI applicant should be at least Graduate
• Past experience and Current job profile
• Probability of staying abroad for the total loan tenure
• Probability of servicing loan with extended tenure if the NRI has returned to India

Repayment Period for NRI’s loan :

Modes of Payment :

The loan has to be paid upfront towards house for entire loan tenure through direct remittances from outside India by the way of normal banking channels or from accounts as permitted by Reserve bank of India. Now-a-days, payments are made through NRE, NRO, NRNR and from FCNR accounts.

Tax Benefits for NRI’s

NRI customers are not liable to avail any kind of tax benefits until and unless he/she files returns and become eligible for tax benefits as provided under Home loans.

Documentation :

1. Copy of Passport
2. Copy of work contract(sometimes called as labor card/contract card)
3. Power of Attorney (POA)-the POA is considered necessary as the borrower is not in India and HFC needs a representative as a replacement for NRI to make deals. Though not necessary but usually POA is drawn in the name of NRI’s parents, children or wife.