House Building Advance Rules (HBA) – 2017

House Building Advance Rules (HBA) – 2017

House Building Advance Rules (HBA) – 2017
Government of India
Ministry of Housing & Urban Affairs
Housing-III Section
Nirman Bhawan, New Delhi,
Dated 09.11.2017
Subject: House Building Advance Rules (HBA) – 2017. 
The following House Building Advance Rules is in supersession of existing
rules on the subject: 
1. Introduction
Grant of House Building Advance for Central Government employees is
regulated in terms of rules and regulations laid down from time to time by
the Ministry of Housing Urban Affairs (erstwhile Ministry of Urban
Development). These rules are as under: 
2. Purpose
House Building Advance (HBA) is admissible to an employee for only one of
the following purposes:- 
i. Constructing a new house on the plot owned by the employee or spouse,
either jointly or individually. 
ii. Purchasing a plot and constructing a house thereon. 
iii. Purchasing a plot under co-operative Schemes and constructing a house/
flat thereon or acquiring a house through membership of Cooperative Group
Housing Societies. 
iv. Purchase/construction of house under the self-financing schemes of
Delhi Bangalore, UP, Lucknow etc. 
v. Outright purchase of a new ready-built house/ flat from Housing Boards,
Development Authorities and other statutory or semi-Government bodies and
from registered builders i.e., registered private builders, architects,
house building societies, etc, but not from private individuals.
vi. Expansion of living accommodation of an existing house owned by the
employee or jointly with spouse. The total cost of the existing structure
(excluding cost of land) and the proposed additions should not exceed the
prescribed cost ceiling under these rules. 
vii. Repayment of loan or advance taken from a Government or HUDCO or
private sources even if the construction has commenced, subject to certain
viii. Existing employees who have already taken Home Loans from Banks and
other financial institutions are allowed to migrate to this scheme, subject
to fulfilment of extant conditions. 
ix. Constructing only residential portion of the building on a plot
earmarked for a shop-cum-residential plot, in a residential colony, subject
to prescribed cost ceiling. 
3. Eligibility
i. All permanent government employees.
ii. All other employees with at least 5 years of continuous service,
provided they do not hold permanent appointment under a State Government
and the sanctioning authority is satisfied about their likely retention in
service till the house is built and mortgaged.
iii. Members of All India Services deputed for service under the Central
Government/Company/ Association/Body of individuals whether incorporated or
not, which is wholly or substantially owned or controlled by the Central
Government or an International Organization, and autonomous body not
controlled by Government or Private Body.
iv. Employees of Union Territories and North East Frontier Agency.
v. Staff/ Artistes of the All India Radio who fulfil the condition
prescribed at (ii) above and have been appointed in long term contracts
extending to the age as per extant rules.
vi. Central government employees governed by The Payment of Wages Act,
vii. Central government employees on deputation to another Department or on
Foreign Service. Such cases to be processed by the Head of the Office of
the Parent Department.
viii. Extant rules for eligibility conditions of Ex-servicemen and of
central government employees under suspension remains unchanged.
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Note: In cases where both the spouses are central government employees
and are both eligible for grant of House Building Advance, the advance
will be admissible to both of them jointly/separately.
4. Cost Ceiling Conditions
i. Cost of the house to be built /purchased (excluding the cost of plot)
should not exceed 139 times of the basic pay of the employee subject to a
maximum of Rs.1.00 crore (one crore) only. In individual cases, if the
Administrative Ministry is satisfied on the merits of the case, the cost
ceiling may be relaxed up to a maximum of 25% by the Head of the
5. Amount of Advance
i. Only one advance shall be sanctioned to the government servant during
his/ her entire service.
ii. The maximum amount of advance shall be:
a) 34 months basic pay subject to a maximum of Rs. 25.00 lakhs only (Rs.
Twenty five lakhs), or cost of the house/flat, or the amount according to
repaying capacity, whichever is the least for construction/purchase of new
b) For expansion of existing house, the amount of HBA will be limited to 34
months basic pay subject to maximum of Rs.10.00 lakhs only (Rs. Ten lakhs),
or the cost of the expansion, or the amount according to repaying capacity,
whichever is the least
c) The amount of the advance shall be restricted to 80% of true cost of the
land and construction of house or cost of expansion of living accommodation
in the case of construction in rural areas. This can be relaxed and 100%
can be sanctioned if the Head of the Department certifies that the
concerned rural area falls within the periphery of town or city.
6. Repayment Capacity
For the purpose of calculating the admissible loan amount, the repayment
capacity of the central government employee shall be calculated as below: 
a) In cases of employee retiring after 20 years 40% of basic pay
b) In cases of employee retiring after 10 years but not later
than 20 years.
Up to 40% of basic pay, 65% of DCR Gratuity may also be
c) In cases of employee retiring within 10 years. Up to 50% of basic pay DCR Gratuity up to 75% can be
7. Applicable Rate of Interest and Methodology of Recovery of House
Building Advance
i. The Interest on Housing Building Advance for the financial year 2017-18
onwards shall be 8.50%. This shall be reviewed every three years to be
notified in consultation with Ministry of Finance.
ii. The methodology of recovery of HBA shall continue as per the existing
pattern of recovery of principal first in the first fifteen years in not
more than 180 monthly instalments and interest thereafter in next five
years in not more than 60 monthly instalments. The advance carries simple
interest from the date of payment of first instalment.
iii. All cases of subsequent tranches/ installments of HBA being taken by
the employee in different financial years shall be governed by the
applicable rate of interest in the year in which the HBA was sanctioned, in
the event of change in the rate of interest.
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The clause of adding a higher rate of interest at 2.5% (two point five
percent) above the prescribed rate during sanction of House Building
Advance, as reproduced below, stands withdrawn.
“Sanction should stipulate the interest 2.5% over and above the
scheduled rates with the stipulation that, if conditions attached to
the sanction including those relating to the recovery of amount are
fulfilled completely to the satisfaction of competent authority, a
rebate of interest of the extent of 2. 5% will be allowed”.
8. Disbursement
i. Advance for purchase of ready built house can be paid in one lump sum as
soon as the applicant executes an agreement in the prescribed form. The
employee should ensure that the house is purchased and mortgaged to the
Government within 3 months of draw! of the advances.
ii. Advance for purchase/ construction of new flat may be paid either in
one lump sum or in convenient instalments at the discretion of the Head of
Department. The employee should execute the agreement in prescribed form
before the advance/ first instalment of advance is paid to him/ her. The
amount drawn by the employee should be utilized for the purchase/
construction of the flat within one month.
iii. Advance for construction/ expansion of living accommodation, etc.,
shall be payable in two instalments of 50% each. The first instalment will
be paid after the plot and proposed house/ existing house is mortgaged and
the balance on the construction-reaching plinth level…
iv. Advance for expansion to be carried out on the upper storey of the
house will be disbursed in two instalments, first instalment on executing
the mortgage deed and the second instalment on the construction reaching
v. In the case of advance for purchase of plot and construction of house,
the advance will be disbursed as below:
Single Storeyed House:
After agreement in prescribed form is executed on production of surety
bond, 40% of the advance or actual cost will be disbursed for purchase of
plot. The balance amount will be disbursed in two equal instalments, first
after the mortgage is executed and second on the construction reaching
plinth level.
b) Double Storeyed House:
30% of advance for cost of plot will be disbursed on executing the
agreement. The balance amount will be disbursed in two equal instalments,
the first on executing the mortgage deed and the second on construction
reaching plinth level.
9. Mortgage and Creation of Second Charge
a) House shall be mortgaged on the behalf of President of India. However,
the employee, if he wishes to take a second charge to meet the balance cost
of the house/ plot or flat from recognized financial institutions, then he/
she may declare the same and apply for NOC at the time of the applying for

NOC for second charge will be given along with sanction order of HBA

. The total loan form HBA and from all other sources cannot be beyond
ceiling cost of the house as defined under para 4 above.
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b) In case if HBA is availed by both husband/ wife jointly,
i. HBA Mortgage paper, insurance paper and other papers regarding property
shall be submitted to one of the loan sanctioning authorities of their
ii. A No Objection Certificate may be obtained from the 2 nd loan sanctioning authority.
iii. The property mortgaged to behalf of President of India, shall be
reconvened on the prescribed form to the central government employee
concerned (or their successors in interest, as the case may be), after the
advance together with interest thereon, has been repaid to Government in
full and after obtaining No Demand Certificate in respect of HBA loan
sanctioned by the 2nd loan sanctioning authority.
10. Insurance
a) Immediately on completion of construction/purchase of house/flat, the
employee shall insure the house with the recognized institutions as
approved by Insurance Regulatory and Development Authority (IRDA), for
not less than the amount of advance and shall keep it so insured against
damage by fire, flood and lightning till the advance together with interest
thereon is repaid in full and deposit the policy documents with the Head of
the Department (HoD). Renewal of insurance will be done every year and
premium receipts produced for inspection of the HoD regularly.
b) Penal interest of 2% over and above existing rate of interest will be
recovered from the employee for those periods which are not covered by
insurance of the house.
11. Migration
For existing House Building Advance beneficiaries who wish to migrate, a
separate order for migration to the revised House Building Advance rules
will be issued shortly.
12. Extant rules
Apart from above stated changes in relevant sections in the earlier version
of House Building Advance rules, all other extant rules shall continue to
apply till further orders.
13. This issues in consultation with Comptroller& Auditor General, in
so far as the persons working in the Indian Audit & Accounts Department
14. Hindi version will follow.
15 This comes to the effect from the date of issue.
(Shailendra Vikram Singh)
Ministry of Housing & Urban Affairs


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[आवासन और शहरी कार्य मन्त्रालय का पत्रांक आई—17011/11(4)/2016—एच—III ​दिनांक: 09.11.2017 के लिए नीचे इमेज पर क्लिक करें]