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Home Loan FAQs - NRIs


The NRI Home Loan is available to Non-Resident Indians and for the purposes of home loans, all HFCs go by the definition of NRI as given by RBI i.e., an Indian citizen who holds a valid Indian passport and who stays abroad for employment / carrying on business or vocation outside India or stays abroad under circumstances indicating an intention for an uncertain duration of stay abroad.

Q1.: For what kinds of property is a NRI eligible for Home loans?
Q2.: What is the eligibility for obtaining NRI Home Loans?
Q3.: What is the repayment period for a NRI Home Loan?
Q4.: How is the mode of payment for NRI home loans?
Q5.: What are the Tax Benefits applicable to Non-Resident Indians?
Q6.: What are the documents required for obtaining NRI Home Loans?

Q1.: For what kinds of property is a NRI eligible for Home loans?
Ans.: A home loan is sanctioned to the NRIs for any of the following housing finance schemes:

a) To purchase a house either ready-built, under construction or from a second owner.
b) For self-construction of a property on a plot of land.
c) To finance the purchase of a plot of land allotted by a society / development authority.
d) For renovation or improvement of an existing property in India.

Q2.: What is the eligibility for obtaining NRI Home Loans?
Ans.:
Your eligibility is calculated in the same way as it is calculated for resident Indians. More emphasis is laid on the following criteria in the appraisal of a NRI case:

a) Qualifications - the NRI applicant has to be graduate
b) Current job profile & Past experience
c) Probability of continuing abroad for the loan tenure
d) Probability of servicing the loan with an extended tenure in case you have to return to India.

Q3.: What is the repayment period for a NRI Home Loan?
Ans.: The housing finance offered to NRIs normally do not exceed 5 years. However, some HFCs offer loans for a term of 7 years. The repayment for the loan is by way of EMIs. The EMIs begin only after the entire loan is disbursed. In case of a part disbursement, you pay simple interest at the rate applicable on the loan amount that is disbursed to you.

Q4.: How is the mode of payment for NRI home loans?
Ans.:
The loan towards the house has to be paid upfront for the entire tenure of the loan by way of direct remittances from abroad through normal banking channels or from such accounts as may be permitted by RBI from time to time. As of today, the payments are done through NRO, NRE, NRNR and FCNR accounts. These accounts change on the basis of RBI permissions to each HFC.

Q5.: What are the Tax Benefits applicable to Non-Resident Indians?
Ans.: No tax benefits are available for NRI customers unless you file returns and thereby become eligible to avail of the tax benefits as mentioned under Home Loans.

Q6.: What are the documents required for obtaining NRI Home Loans?
Ans.: NRIs are required to submit additional documents than is normally required for a resident Indian.

a) A copy of the passport
b) A copy of the works contract (also sometimes referred to as the contract card/labor card)
c) The power of attorney (POA). The POA is required because the borrower is not based in India and in such a scenario; the HFC would need a representative 'in lieu of' the NRI to deal with as required. Although not mandatory, the POA is usually drawn on the NRI's parents, wife or children




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