Premier banks and housing finance institutions help NRIs by homes in India, but there are a few factors to consider before opting for the home loan.

Almost every Indian today, young or old, is aware of the term ‘NRI’. That is because almost every Indian family has some relative or close friend working in a foreign country or who is settled there for a certain amount of time. These NRIs (Non Resident Indians) keep their ties with India owing to their friends and relatives living here. Other connections may include a business based in India, or property in their name.

In recent years, the Government of India has been quite encouraging of NRIs wishing to purchase property in India. NRIs may also invest in Indian businesses (such as start-ups) by way of venture or angel funding. However, the NRI home purchase market is a large one and it is steadily growing every year. Responding to this need, leading housing finance companies offer NRI home loan products to suit a bevy or requirements.

But the NRI may not get the loan if –  

NRI home loans differ from other home loan products in several ways. It is important to know the conditions under which NRIs may not get home loans in India:

  • NRIs may not invest in certain kinds of properties: plantation properties, plantations, agricultural land plots and/or houses constructed on the same, as well as farmhouses. Hence, if NRI home loans are applied for these categories, they are not liable to get the loan. However, it is better to check the existing guidelines on the same.
  • The minimum requirement for the NRI home loan eligibility is that the NRI must have worked at least for one year in a foreign-based company, if salaried. Self-employed persons must have been working and based abroad for at least three years prior to applying for the home loan. Persons not fulfilling these conditions may not apply for the loan.
  • The country the NRI works in is also an important consideration for housing finance companies and banks to approve the application. For instances, most lending institutions perceive countries such as Africa as ‘negative areas’, with NRIs working there not being considered eligible for a home loan. However, your bank or financial institution will have specific guidelines for the same.

But NRI home loans are easy to get, since –

  • Leading housing finance companies like PNB Housing Finance Limited (PNBHFL) have made the NRI home loan application process quite simple – the application can be made online, with all required documents uploaded online. However, the NRI applicant must have an India-based Power of Attorney to execute the loan process.
  • Banks provide NRIs with NRE/NRO accounts, which are essential for processing the loan monies. Similarly, the NRI may remit monthly EMIs to these accounts.
  • PNBHFL accounts for cost escalations while constructing the property, and hence, disburses more money as the case may be.

Keyword: NRI Home loans