The Tamil Nadu Government has decided to waive a portion of the interest on home loans for borrowers from housing co-operatives societies.
This is among the measures to make housing affordable for people in the low and middle-income group.
To increase the supply of affordable housing for people in the low and middle income category, real estate developers will be allowed to construct larger buildings in a given land area without additional charge.
These were among the measures the Finance Minister, Mr O. Paneerselvam, announced in the Budget for 2012-13 in the Assembly.
The Minister said that the Government was fulfilling its electoral promise by waiving a part of the interest and the full penal interest on housing loans from co-operative housing societies.
It will introduce a scheme providing for an interest waiver of 50-75 per cent for low income group borrowers, 29-50 per cent for those in the middle income group and 10-25 per cent for borrowers in the high income group. The penal interest will be fully waived for all the borrowers, he said.
The interest loss compensation will be Rs 390 crore to the Government and the loss to the co-operatives through the waiver of penal interest will be Rs 545 crore. Over 1.14 lakh borrowers will be benefitted through this scheme, which will be available up to September 30, 2012. The benefit to the co-operative housing societies is that they will be able to collect Rs 665 crore as over-due loans.
To increase the supply of housing space in the affordable segment, the Minister said the Government will allow a higher Floor Space Index – the ratio of built up space in a given area of land – without charging any premium. So the cost of house construction will be cheaper for the low and middle income group housing, he said.