7th Pay Commission: Post March 31 House Building Advance interest rates likely to be hiked

The government had said that the HBA 2017 would be applicable for an employee who has completed a minimum of 10 years service

New Delhi, Jan 12: In some good news for Central Government employees, they are now eligible for low interest Housing Building Advances (HBA).

The Ministry of Housing and Urban Affairs had on April 1 2022 lowered the rate of interest on HBA to 7.1 per cent until March 31 2023. Reports say that from the new financial year the government is likely to increase the interest rates on HBA.

The HBA facility is offered to government employees of the Central Government under the 7th Pay Commission and according to the regulations the employees ae eligible for interest-bearing advances for a variety of things. These include building a new house, expanding their living space, buying pre-built homes or apartments from housing boards, developed authorities, registered builders and buying a plot for a new home. The government had also said that the HBA can be used to pay back the loans or advances obtained from the government, private parties or HUDCO.

According to the recommendations of the 7th Pay Commission, Central Government employees are eligible to get the least of the following as HBA- 34 times of Basic Pay or Rs 25 lakh or, anticipated price of house, whichever is lower. In order to avail HBA a Central Government Employee should have completed at least 10 years of service.

The 2017 HBA or House Building Rules says that a Central Government Employee is eligible for up to 24 months of basic salary with an HBA cap of Rs 25 lakh. The employee will be able to get the lowest amount as HBA if the cost of the house or apartment is less than Rs 25 lakh. The HBA can also be used to expand an existing home. Employees will be eligible for 34 months of basic pay under this clause, upto a maximum of Rs 10 lakh or the total cost of expansion of up to Rs 10 lakh.