house building advance for central government employees

About HBA for central government employees

The interest rate for loans called House Building Advance (HBA) given to Central Government Employees has certainly enhanced for the year 2023-24 compared to the previous year, 2022-23. The Ministry of Housing and Urban Affairs has decided that Central Government employees will be charged an interest rate of 7.5 per cent for loans given in the financial year 2023-24.

Following a change in the interest rate decided by the Ministry of Finance, Department of Economic Affairs on March 20, 2023. The Ministry of Housing & Urban Affairs communicated this through an Office Memorandum dated March 27, 2023.

house building advance interest rate

The interest rate for House Building Advance loans given to Central Government Employees during the financial year 2023-24 (from April 1, 2023, to March 31, 2024) will be 7.5%. In the year 2022-23, the interest rate for House Building Advance (HBA) was 7.1%. In the year before that, 2021-22, Central Government Employees were given an interest rate of 7.9% for a period of 18 months (from October 1, 2020, to March 31, 2022) for HBA loans.

HBA is a benefit provided to Central Government Employees based on the suggestions from the 7th Pay Commission. As per the rules, these employees can get loans with interest for different reasons like building a new house, buying land to build a house, making their current living space bigger, and purchasing ready-made houses or flats from approved sources such as housing boards, development authorities, and registered builders.

house building advance interest rate calculator

Let us understand how to calculate the HBA amount with a practical example.Rajesh, a Central Government Employee, has been granted an HBA loan of ₹3,00,000 for building a new house. The interest rate for the HBA loan is 7.5%. The loan tenure is 10 years.


Principal Amount (P): ₹3,00,000

Interest Rate (R): 7.5% per year

Time (T): 10 years

The formula to calculate the interest on the loan is:

Interest (I) = (Principal × Rate × Time) / 100

Substitute the values into the formula:

Interest (I) = (₹3,00,000 × 7.5 × 10) / 100 = ₹2,25,000

So, the total interest that Rajesh would pay over the course of 10 years is ₹2,25,000.

To find the total amount to be repaid (including both principal and interest):

Total Amount = Principal + Interest

= ₹3,00,000 + ₹2,25,000

= ₹5,25,000/-

Therefore, over the 10-year loan period, Rajesh will need to repay a total of ₹5,25,000, which includes both the initial loan amount and the interest. Keep in mind that this is a simplified example, and real-life scenarios could involve additional factors and complexities.

Documents required for HBA loan

The specific documents required for a House Building Advance (HBA) loan can vary based on the policies of the organization and government regulations. However, generally, the following documents are more often required when applying for an HBA loan -

  1. HBA Application Form
  2. Property Ownership Proof
  3. Salary Certificate
  4. Employment Proof
  5. Income Proof
  6. Property Valuation Report
  7. Approved Building Plan
  8. Cost Estimate
  9. No Objection Certificate (NOC)
  10. Legal Clearance Documents
  11. Affidavits (To conform that the property is not mortgaged, pledged, or used for any other loan purpose)
  12. Bank Statements
  13. KYC Documents
  14. Spouse's Consent

HBA form pdf

Here’s the document that the central government has officially revised HBA loans for central government employees

Click Here:house building advance

How to apply for an HBA loan?

Here's a simple step-by-step guide on how to apply for a House Building Advance (HBA) loan:

  • Check Eligibility: First, make sure you meet the requirements to apply for the loan. Check how long you've worked and your job status.
  • Gather Required Documents: Collect the papers you need, like proof that you own the property, papers about your job and salary, and reports about the property's value.
  • Obtain Application Form: Get the application form for the loan. You can find it on your work's official website or ask your HR department.
  • Fill Out the Form: Fill out the form with correct information. Write down things like your personal details, job info, and how much money you want to borrow.
  • Attach Documents: Put the papers you collected with the form. Make sure you have all the right papers they need.
  • Submit the Application: Give the filled-out form and papers to your HR department or whoever handles the loan requests.
  • Verification and Approval: They will look at your form and papers to make sure everything is okay.
  • Loan Sanction: If they agree, they'll say yes to your loan request.
  • Disbursement: They will give you the money you asked for, following the loan rules.
  • Repayment: You'll have to pay back the money as they tell you. This usually means paying some of it from your salary over time.

Eligibility and maximum limit for HBA

A Central Government Employee can receive a House Building Advance (HBA) based on their basic pay for up to 34 months. However, there's a maximum limit of Rs 25 lakh. If the property's cost (like a house, flat, or plot) is lower than Rs 25 lakh, the employee will get the smaller amount as HBA. The government decides the house building advance for central government employees by looking at the 10-year G-Sec yield.

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