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- Objective: To address the financial needs of senior citizens owning self-occupied property for a decent life.
- Eligibility:
- Residential house/flat owner, resident of India, aged 60 years & above.
- Property must be in single name or jointly with spouse; if single, a “will” in favor of spouse (co-borrower) is required, registered and superseding earlier wills. No fresh will during the loan period.
- For joint accounts, one spouse must be 60+ and the other at least 58 years. Age computed by completed years.
- Owner(s) must have clear title of residential property in India.
- Property must be self-acquired, self-occupied, and the primary residence.
- Property must be free from encumbrances.
- Loan allowed for owners with one surviving legal spouse; single owner if no spouse.
- No income or credit requirements to qualify.
- Qualifying / Maximum Amount of Loan / Margin:
- Loan amount depends on the realizable value of the residential property, with a 20% margin.
- Maximum loan amount, including interest, is restricted to ₹100 lakh. Lump-sum payments permitted only for medical treatment (ceiling of ₹15 lakh).
- Monthly payments based on ‘Reverse Annuity Mortgage’ basis.
- Bank revalues property every five years to adjust loan amount or installments as needed.
- Margin: 20% of the realizable value of the property to determine the qualifying amount.
- Purpose of Loan: For generating income/supplementing pension/other income for daily requirements. Loans for speculative/trading and business purposes are prohibited; an undertaking is required.
- Income Criteria: NIL.
- Disbursement of Loan:
- Monthly installments calculated on reverse annuity basis during the loan tenure or until the death of the last surviving spouse.
- Installments continue after the first spouse’s death for the surviving spouse.
- Life certificate obtained annually in November.
- Loan installments credited to the borrower’s savings account; joint accounts opened with “either or survivor” clause if applicable.
- Tenor of Loan:
- 60-70 years: 15-20 years.
- Above 70 years: 10-15 years.
- Security:
- Equitable mortgage of self-occupied residential property, valued by an approved valuer. Revaluation every five years.
- Proposals for ancestral properties can be considered by AGM-PLP & CHCAC and above, subject to specific safeguards.
- Age of Property: Residual life should be at least 20 years; architect’s certificate required at the first valuation.
- Repayment:
- Loan due 6 months after the death of both spouses. Bank can sell property for loan adjustment if not repaid within 6 months.
- Pre-Payment of Loan: Borrower may pre-pay the loan anytime; a 2% charge applies for takeovers by other financial institutions.
- Insurance & Maintenance of Residential Property:
- Borrower must insure property against calamities.
- Borrower responsible for paying taxes and maintaining property in good condition.
- Bank reserves the right to inspect property and take action if borrower fails to maintain obligations.
- Processing Fee: Half month’s loan installment, max ₹15,000 + taxes.
- Documentation Fee: NIL.
- Notice to Legal Heirs: Notice to all legal heirs after the death of both borrowers, sent by registered post and published in the newspaper, applicable even for heirs outside India.
