For what purposes are loans available to NRIs?
NRIs can avail loan for buying or constructing a new home, extending or improving an existing home or even to buy a plot.
What are the Guidelines Issued by the Reserve Bank of India for grant of Housing Loans to NRIs?
The loan amount shall not exceed 85% of the cost of the dwelling unit.
Own contribution, which is the cost of dwelling unit financed less the loan amount, can be met from direct remittances from abroad only through normal banking channels, your Non-Resident (External) [NR (E)] Account and /or Non-Resident (Ordinary) [NR (O)] account and /or Non-Resident Special Rupee account [NRSR] in India.
Repayment of the loan, comprising of the principal and interest including all the charges are to be remitted from abroad only through normal banking channels, your Non-Resident (External) [NR (E)] Account and /or Non-Resident (Ordinary) [NR (O)] account and /or Non-Resident Special Rupee account [NRSR] in India.
What is meant by "Own Contribution"? How can this "Own Contribution be paid"?
Own Contribution is the cost of the dwelling unit financed less the loan amount. The own contribution should be met from direct remittances from abroad through normal banking channels or from the Non-Resident (External) Account/Non-Resident (Ordinary) or the Non-Resident Special Rupee account in India.
What are the common documents to be submitted along with the application?
The following documents are required along with the application form:
a) Photocopy of the labour contract duly countersigned by your employer (translated to English for non-English documents).
b) Latest salary certificate (in English) specifying the following:
c) Name (as it appears in the passport).
d) Date of joining.
e) Passport Number.
f) Designation.
g) Perquisites and salary.
h) Photocopy of labour card/identity card.
i) Photocopy of valid resident visa stamped on the passport.
j) Photocopy of monthly statement of local bank account.
k) Property related documents.
What security will I have to provide?
Typically the security for the loan is first mortgage of the property to be financed, normally by way of deposit of title deeds and/or such other collateral security as may be necessary.
In addition interim security may be required, if the property is under construction. Collateral or interim security could be in the form of assignment of life insurance policies, surrender value of which is at least equal to the loan amount, pledge of shares and such other investments.
Can I give a Power of Attorney in favour of a person of my choice in India to complete loan formalities on my behalf?
Yes. Normally it is desirable to appoint a Power of Attorney in India to represent you in dealings in India. The Power of Attorney should be executed as per drafts provided by the housing finance company. The Power of Attorney can be given to any person of your choice in India.
How do I Repatriate the sale proceeds?
Repatriate the preceeding as the RBI has vide Notification No.FERA/152/152/93-RB dtd.26.5.93 allowed repatriation of Investment in Residential property to persons of Indian origin whether holding Indian passport or a Foreign passport (NRI) after obtaining the prior approval from the RBI and this facility is restricted to a maximum of two houses.
The above permission allowing repatriation is subject to the following conditions :-
a) The residential properties are purchased on or after 26.6.1993.
b) the residential properties are not transferred or sold for a period of 3 years from the date of the final purchase deed or from the date of the payment of final instalment, where the agreement for purchase so provides.
c) only the amount of sale proceeds equivalent to the original investment in foreign exchange will be allowed to be repatriated outside India; balance if any will have to be credited to the NRO Account of the NRI.
i)The repatriation is subject to prior approval from RBI which is required to be obtained in Form IPI 8, within a period of 90 days of the sale of the property. Form IPI 8 must be accompanied by a copy of the Form IPI 7 submitted earlier at the time of acquisition of the property.
ii) As regard the property which you may inherit from your parents after their death you shall be entitled to hold the same subject to the rules and regulation of Foreign Exchange Manuals but repatriation shall not be allowed as aforementioned
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