The National Housing Bank has been set up under the National Housing Bank Act, 1987 as an apex institution to promote housing finance institutions both at local and regional levels and to provide financial and other support to such institutions. The National Housing Bank (NHB) is keen that not only more Housing Finance Companies (HFCs) should come up, but also that they should be sound, healthy, viable and cost effective.
The NHB at present supports the activities of HFCs in the private and joint sectors in three major ways:
a. Equity participation to the extent of 20 percent of their paid-up capital
b. Cent-percent refinance in respect of
i) Housing loans up to Rs.1 lakh for built-up accommodation up to 40 sq m and
ii) Housing loans up to Rs. 30,000 for up gradation and major repairs.
c. Ad hoc financial assistance to meet short-term gaps in resources
The leading Builders in Kochi
have tasted success only due to the liberalized attitude of the housing finance institutions. Just like the role played by the National Bank for Agriculture and Rural Development (NABARD) in assisting the banks and other financing institutions to manage their book of accounts, the NHB has been active in the housing development sector.
The NHB came to the rescue of almost all the major financing institutions that gave loans to the various housing cooperatives. The leading builders however, never defaulted in loan repayments mainly due to the phenomenal profits generated by them in the hot Kochi real estate market. Even before the building works commenced in some of the real estate projects in the prominent localities in the city, the entire apartment units being put up for sale has been sold out in record time.