Credit Risk Guarantee Fund Scheme (CRGFS) for Low Income Housing

OBJECTIVE

  • Provide default guarantee for housing loans up to ₹8 lakh (increased from ₹5 lakh effective 01.10.2014) sanctioned and disbursed on or after 03.01.2013.
  • Target new borrowers in EWS (Economically Weaker Sections) and LIG (Lower Income Groups) categories in urban areas.
  • No collateral security or third-party guarantees required.

ELIGIBLE BORROWER

  • New individual borrowers in EWS/LIG categories seeking individual housing loans not exceeding ₹8 lakh.
  • Housing unit size: Up to 430 sq. ft. (40 sq. m.) carpet area.
  • Group or housing society formation of at least 20 members is also eligible.

ELIGIBLE ACTIVITY

  • Housing loans for:
    • Home improvement
    • Construction
    • Acquisition and purchase of new or second-hand dwelling units
  • Loan amount: Not exceeding ₹8 lakh per person in urban areas.

EXTENT OF GUARANTEE (For Individual Borrowers)

  • For Housing Loan Amount up to ₹2 lakh:
    • Guarantee: 90% of the amount in default, capped at 90% of the sanctioned housing loan amount.
  • For Housing Loan Amount above ₹2 lakh and up to ₹8 lakh:
    • Guarantee: 85% of the amount in default, capped at 85% of the sanctioned housing loan.

GUARANTEE FEE

  • One-time Fee: 1.00% of the total loan amount, payable upfront to the Trust.
  • The fee is calculated based on the sanctioned loan amount, regardless of disbursement status.
  • Payment Terms:
    • Due within 30 days from the first disbursement of the housing loan or from the date of Demand Advice of Guarantee Fee, whichever is later.
  • Borrower Charges:
    • No upfront processing fee charged from the beneficiary.
    • No annual fee under the scheme.

LOCK-IN PERIOD

  • Claims cannot be made on the Trust for settlement within:
    • 24 months after the last disbursement to the borrower.
    • 24 months from the date of guarantee cover for the housing loan.
    • 2 months after completion of the house, whichever is later.

RISK WEIGHT

  • Zero risk weight for the guaranteed portion.
  • The outstanding balance beyond the guaranteed portion will attract risk weight appropriate to the counter-party.

PROVISIONING

  • No provision required for the guaranteed portion if the advance becomes non-performing.
  • Outstanding amount in excess of the guaranteed portion should be provided for as per existing guidelines for provisioning of non-performing advances.