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HBA Rules House Building Advance to Employees - Rules Guidelines Complete Guide Latest Slabs of HBA

AP HBA House Building Advance to AP Employees - Rules Guidelines Complete Guide Latest Slabs of HBA. AP Government has facilitated its employees with House Building Advance to the Employees who are in necessity of House Building. The Latest Rules Norms on House Building Advance HBA are explained below. LOANS AND ADVANCES – House Building Advance – Admissibility-Eligibility Rules see Below. AP Housing Loan to Employees / Teachers from Government of Andhra Pradesh / Telangana. 

AP HBA House Building Advance to AP Employees - Rules Guidelines Complete Guide Latest Slabs of HBA

Introduction on House Building Advance: 
House Building Advance has been discussed in the following Official Orders of Government of AP.
  1. LOANS AND ADVANCES A.P.F.C Vol-1.Articles 226 to 244 deals with L &A 
  2. HBA rules issued in GO MS NO 311 F&P(FW A&L)DEPT DT 6-11-96
GENERAL PRINCIPLES TO KEPT IN VIEW FOR SANCTIONING LOANS AND ADVANCES (House Building Advance)
  • 1.where both wife and husband are employees, only one among them is entitled.
  • 2.Repayment capacity of the loanee should be assessed before sanctioning the loan by the competent Authority
  • 3.Sufficient budget provision must be there for the advance.
  • 4.To safe guard the Govt. amount material documents should be examined before sanction of the loan, and even after the loan amount.
  • 5 Standards of Financial Propriety: Art.3 of T. S. Financial Code Volume I
  • 6 Advances should not be sanctioned for clearance of personal loans.
  • 7 Marriage advance can be sanctioned even after the event if the application was made prior to the event.
  • 8 With the permission of the Head of the department, second Mortgage may be created for loans under House Building advances for meeting balance cost of house by recognised financial institutions like Banks, Co-operative Societies & other Public companies formed for the purpose
TYPES OF LOANS:- 
1. INTEREST BEARING LOANS:-  These are 3 Types. 
One of them is House Building Advance Loan. So on availing House Building Loan from Government, Interest is to be paid as per the norms.
2. NON-INTEREST BEARING LOANS;

House Building Advance Rules in Brief:
1) HOUSE BUILDING Advance Sanctioning purpose:
Below are the purpose for which HBA House Building Advance can be sanctioned for a Government servant. The advance shall be sanctioned for the purpose of :
  • A] Purchase of House site and construction of House or Flat
  • B] Construction of House/Flat on the site already owned by the applicant/ spouse /minor child.
  • C] For Purchase of House site
  • D] Purchase of ready build house or flat
  • E] Repairs/ extensions / enlargements / additions / improvements to the house owned by the applicant / spouse / minor child.

Eligibility for House Building Advance HBA 

[HBA rules were issued in GO MS NO 311 F&P(FW A&L)DEPT DT 6-11-96]
Eligibility for House Building Advance (House Building Loan)
  • i) Permanent Employee with regular service of 8 years. (Regular Govt employees who have completed 8 years of service is eligible for this advance)
  • ii) When the Employee/Spouse/minor child does not own a house at the same place.
  • iii) Employees not on deputation.
  • iv) Either spouse only one Govt servant is eligible. (If both Wife and Husband are Govt employees; only one of them are eligible)
  • v) Either spouse’s name site is eligible for sanction of HBA
  • vi) If a Govt. Servant owns a house jointly with relatives and desires to build a separate house for his bona fide residential purpose.
  • vii) No 2nd advance is sanctioned for purchase of ready built house/ construction/ site. 
  • viii) AIS Officers who are not on deputation to the Central Govt. permanently or not on deputation for more than 5 years continuously
5] The powers have been delegated to all the head of the Offices for sanction of loans and advances

REPAYMENT OF House Building Advance [RULE 9]

  • A] for construction of house, ready built house, flat — 240 instalments for principle and 60 instalments for interest;
  • B] for repairs — 75 installments for principle and 15 installments for interest;
  • C] for house site –60 installments for principle and 12 installments for interest;
  • 9] The property should be insured for the amount of advance plus interest.
  • 10] If a Govt servant died while in service; the recovery of outstanding balance of HBA plus interest shall be waived by the head of the department [Authority: Rule 14 ]
  • 11] A Govt servant who have taken HBA will not be eligible for Govt accommodation.
  • 12] The property should be pledged with the Government;
  • 13] Govt servant is also eligible for second loan of HBA if first advance is pending .
  • 14] The recovery should be commenced from the date of completion of the building or 18 months from the date payment of 1st installment of 1/3rd advance for construction of house / flat.
  • 15] The House Building Advance bill should be accompanied by the ink signed sanction order and necessary certificates issued by the Competent authority
  • 16] The authorities competent to sanction are responsible for irregular sanctions if any; and Govt shall initiate disciplinary action against them as per APCS [CCA] RULES.
  • [Authority: Govt memo no 17348/709/A1/A&L/83, F&P(FW A&L) Dept dt 9-6-83.
  • 18] Necessary entries should be made in the SR under proper attestation
  • 19] The Government Servant shall submit utilization certificates from time to time for release of installments wherever necessary
  • 20] Finally the Government servant should submit completion certificate to the sanctioning authority.
HOUSE BUILDING ADVANCE (Forms & Agreement formats) 
  • 1. Application Form for the grant of House Building Advance to the Government Employees FORM-I Rule-(5)
  • 2 Agreement Bond FORM- IX Rule-7(2) & 7(5) (a)
  • 3. Form of Mortgage Deed to be Executed when the property is free hold and is in the name of the applicant FORM-X Rules 7 (1) (b), 7 (2) (a), 7 (3) (b), 7 (4), 7 (5) (a) and 7 (5) (c)
  • 4. Utilization Certificate FORM-XII Rule-7 (2) (a) and 7 (5 ) (a)
  • 5. Deed for Reconveying the Mortgaged Property FORM XIV [ See Rule 13]

House Building Advance Latest Slab Rates - Amount to be Sanctioned

Here is the Latest House Building Advance Maximum amount to be sanctioned basing on their Pay Slabs. The latest applicable GO is G.O.MS.No. 130 Dated: 01-07-2016. This Order has been issued in Pay Revision Commission 2015. The Latest HBA Rates will be updated as soon as the revised orders are issued.
  • HBA for Purchase of House Site 10 Times of Basic Pay or 2 Lakhs whichever is less
  • HBA for Repairs / Extensions etc 20 Times of Basic Pay or 4 Lakhs whichever is less
Ceiling of House Building Advance to the State Government employees, for the purchase of ready built house/ flat, for purchase of site-cum-construction of new house/ flat and for the construction of new house/ flat on the site already owned by the employee as follows
Latest Pay ranges in Revised Pay Scales, 2015 www.apteachers.in Enhanced Maximum ceiling / Quantum of HBA to be sanctioned Rate of interest
Employees drawing basic pay upto Rs.26,600 per month Rs.10.00 lakhs or 72 times of basic pay - whichever is less For Class-IV employees @ 5.00% p.a.
For others @ 5.50% p.a.
Employees  drawing  basic pay above Rs.26,600 p.m. and upto Rs. 42,490 p.m. Rs.12.30 lakhs or 72 times of basic pay - whichever is less -do-
Employees drawing basic pay above Rs.42,490 p.m. and upto Rs. 61,450 p.m. Rs.15.00 lakhs or 72 times of basic pay - whichever is less -do-
Employees  drawing   basic pay above Rs.61,450 p.m. Rs.20.00 lakhs or 72 times of basic pay - whichever is less -do-
All India Service Officers working in the State (All India service officers working in the State may be given the option to choose either the State Govt. ceiling or to adopt Govt. of India rules) Rs.25.00 lakhs or 50 times of
basic pay whichever is less
-do-

Interest Rates for House Building Advance are as follows:
  • For Class IV Employees, Interest rate @5% per annum
  • and For all Other employees interest rate @ 5.5% per annum
These interest rates are far below the interest rates sanctioned by any financial institution for Housing Loan.ap teachers .in website 

House Building Advance Application Process

HBA application process, Form to be used for various HBA purposes, documents required, submission of utilisation certificate period are listed below. 
Name of the HBA Form to be used Documents required for HBA Purpose Submisison of UC Time
HBA Purchase of SITE
II
Agreement 2 Months
HBA for construction on Site owned
I
1.Copy of Sale Deed
2.House Plan
3. Detailed Estimates
4.Declaration
18 Months
HBA for Site cum Construction www.apteachers.in
I
House Plan
Detailed Estimates
Declaration
Site : 2 Months
Construction.: 16 Months
HBA for Ready Built House/ Flat
I
Valuation Certification 2.
House Plan 3
.Declaration
3 Months
HBA for repairs
III
Certificate by EE cadre
Detailed Plan + Estimates by Competent Authority
Approved House Plan
6 Months

HBA Sanctioning Authorities:
House Building Advance will be sanctioned by the competent authorities as mentioned below.
  • i) NGOs - HEAD OF OFFICE
  • ii) HEAD OF OFFICE - NEXT SUPERIOR OFFICER HoD
  • iii) ALL INDIA SERVICE OFFICERS & HoDs - GOVERNMENT
MODE OF PAYMENT - HBA 
  • For purchase of site.  - Lump sum 
  • Repairs/exten./improve. - Lump sum
  • Ready Built House/Flat. - 10% in cash to the loanee and 90% through a/c payee cheque in f/o the vendor.
  • Construction on owned site.- 1/3rd at each stage. (At each stage of i) mortgaging the land in f/o Govt., ii) walls reaches lintel level and iii) construction reaches roof level)
  • Site cum Construction.-  25% for purchase of land
  • 50% on mortgaging the land along with house to be built.
  • 25% when construction reaches roof level.
RECOVERY OF H.B.A
  • Purchase of site 72 Instl.(60 Prl.+12 Int.)
  • Ready built House/Flat 300  (240 Prl.+60Int.)
  • Const. on own site 300  (240 Prl.+60Int.)
  • Site cum construction 300  (240 Prl.+60Int.)
  • Repairs/Exten/Improv. 90 (75 Prl.+15Int.)
Mode of Payment and Recovery is explained in Tabular Form below
Nature Mode of Payment of HBA at various stages Recovery of HBA
Purchase of Site Lumpsum 72 Installments (60 Prl. + 12 Int.)
Ready Built House/ Flat 10% in cash to Loanee & 90% to Vendor 300 Installments (240 Prl.+60 Int.)
Construction of House on the site already owned 1/3rd at each stage 300 Installments (240 Prl.+ 60 Int.)
Purchase of site and construction of House 25% for purchase of land; 50% on mortgaging the land along with house; 25% when construction reaches roof level 300 Installments (240 Prl. + 60 Int.)
Repairs, extensions & additions Lumpsum 90 Installments (75rl. + 15 Int.)

CALCULATION OF INTEREST on HBA

Calculation of interest
Simple Interest will be charged.
Calculation of interest 3 types-

1) If principal amount is repaid regularly:-
Interest = n x (n+1)/2 x (x/12) x (r/100)
n=number of instalments
x=amount of each installment
r=rate of interest

2) If the repayment is not in regular process:-
Interest = A x (1/12) x (r/100)
A= Total diminishing balance
r = rate of interest..

3)If the repaid amount partly in EMI basis and the balance paid in lumpsum:-
Interest= n(A-L)/2 x r/100 x 1/12

ILLUSTRATION / Example of Interest Calculation on HBA
A Government servant was sanctioned a loan of Rs. 10,000/- in January 2008 and it is repayable in 10 equal monthly installments commencing the recovery from the pay of February 2008 payable on 1st ,March 2008.. The rate of interest is 5.5% P.A. Calculate the interest payable.

Answer: 
Principal amount is repaid in equal instalments from month to month
 Interest = n x (n+1)/2 x (x/12) x (r/100)
               =10(10+1)/2 x (1000/12)  x (5.5/100) = 252.00

PENAL INTEREST RECOVERABLE
  • The entire loan will be recovered by applying the provisions of RR Act
  • A penal interest of Double the normal rate should be recovered.
  • Disciplinary action under CCA rules for misuse of loan amount should be taken
  • When house/flat is holly rented out for commercial purposes
  • (However, where the renting took place due to transfer, and the family is also not residing in it is exempted. (and) when the house/flat is partly rented out for residential purposes and the employee resides in the other portion is also exempted.)
  • Penal Interest will be charged at double the rate of normal interest in case the advance is mis-utilised or not utilized at all
  • Penal Interest will be charged at 1 ½ times the normal rates for non-compliance with formalities
  • When the HBA rules are not complied, the loan amount together with interest thereon should be recovered in lumpsum under Revenue Recovery Act.
  • And also disciplinary action under CCA rules shall be taken.
Penal Interest at 1 1/2 Rate
i) Non-observance of HBA Rules.
ii) Willful delay in complying various formalities.
iii) Willful delay in observance of HBA Rules in any manner.
iv) Over due monthly installments
v) Failure to utilize the loan within the stipulated period
 
Penal Interest at Double The Rate
i) In case the advances are misutilised or not utilised at all
ii) If the house is rented out for locating the shops etc.
Penal Interest will be charged at double the rate of normal interest in case the advance are mis-utilized or not utilized at all and at 1 ½ % times the normal rates for non-compliance with formalities

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5 comments:

  1. Your articles are inventive. I am looking forward to reading the plethora of articles that you have linked here. Thumbs up!Word Hurdle

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  3. Please clarify penal interest means 1+ 1 1/2 times or one and half time

    ReplyDelete
    Replies
    1. Means for the default period interest and penal interest both shall be charged.
      If interest is 5% then penal is 7.5%.
      For default period the employer will charge 12.5% or otherwise.

      Delete