NHB final operational guidelines to benefit senior citizens

New Delhi, May 31 (UNI) National Housing Bank (NHB) today released the Final Operational Guidelines for Reverse Mortgage Loans (RML) which strikes a balance between the risk perception and other requirements of the lenders and the expectations of the senior citizens.

The new guidelines include restricting the extension of RML to self-acquired, self-occupied residential properties owned by senior citizens, having a residual life period of at least 20 years.

The guideline adds that the Primary Lending Institutions (PLIs) may consider ensuring that the equity of the borrower in the residential property (equity to value ratio - EVR) does not at any time during the tenure of the loan fall below 10 per cent.

Further, the PLIs have been advised to be selective in considering lump-sum payments option and may frame their internal policy guidelines, particularly the eligibility and end-use criteria.

However, these conditions would need to be fully disclosed to potential borrowers upfront, said the guideline.

Restriction on the married couples being eligible as joint borrowers for financial assistance provided both are above the age of 60 years, has been relaxed so as to include those couples also, wherein one of the borrowers is below the age of 60, it added.

The age criterion for the couple has been left to the discretion of the PLIs.

Further, it has been stipulated that there will not be any levy/penalty/charge for prepayments made by the borrower under RML.

These guidelines are based on the feedback/suggestions received, by NHB and the same will be followed by banks and HFCs.

UNI