Kedalla - HDFC BANK

Guidelines for Housing Loan Applicants from the Housing Development Finance Corporation Bank of Sri Lanka

Date of issue May 01, 2005 The Housing Development Finance Corporation Bank is an institution under the Ministry of Housing and Construction Industries, Eastern Province Education and Irrigation Development. The main objective of this Bank is to provide housing related finance to facilitate the national goal of decent housing for all.

1. Purposes for which loans are granted

• To build a house
• To add a new part to a house /extentions
• To complete a partly built house
• To obtain water facilities, sanitary facilities and electricity
• To purchase a house
• To purchase a plot of land to build a house
• Redemption

2. Those who can obtain loans

• Private individuals
• Joint applicants ( Husband / wife )
• Daughter or son jointly with father or mother

3. Loan amount

• From Rs. 50,000/- upwards (Maximum repayment period varies according to age)
  

4. Security

• The land on which the loan is invested
  

5. Maximum amount of loan

• Purchase of house: 70% of the forced sale value
• Construction loans: 75 % of the total estimated expenditure (BOQ )
• Purchase of Building Blocks 60% within Municipality limits and 50% Pradeshiya Sabha limits

Maximum Loan Installment

• Salaried employees: 40% of the salary (within 60% of total fixed commitments)
• Others: Subject to evaluation of disposable income that can be proved.

6. Preliminary Account

• A Savings Deposit Rs. 500 /- to open a ‘Prathilabha’ Savings Account with the Bank.

7. Insurance cover

7.1 Loan Protection Insurance cover (preferred)

Only a single premium is payable on this insurance. The main benefit of this insurance is in the event of death of the borrower, the dependents will not be burdened with the repayment of the loan. This insurance is not compulsory, but recommended.

7.2	In the event of a defect in the title, a title insurance is mandatory
7.3	Fire Insurance is mandatory and should be renewed annually.
*	For purchase of house
*	Construction
*	Redemption loan (if there is a house)

8. Documents to be attached to the loan application

8.1 Personal details:

Birth Certificate Original and 2 photo copies
National Identity Card Original and photo copy / valid Passport (period not expired)
Marriage certificate Original and 1 photo copy. (applicable only to joint applicants)

8.2 Proof of Income

If you are a salaried employee, a statement of salary particulars and confirmation of employment from your employer with full details of deductions along with duly perfected HDFC Form 28 A ( supplied by us.)

If you are an income tax paying business person, 3 years of Income Tax Reports and Audited financial statements together with Bank statements for the last year should be provided

9. Securities

Legal Documents

9.1	Original deed and 2 photo copies along with copies of previous deeds and plans to cover title upto 30 yrs
9.2	Extracts of volume folios of the Registers maintained at the Land Registries to cover title up to 30 years.
9.3	Approved survey plan with 3 copies there of (plan should be drawn within 20 years). (access to the land connected to a main road should be shown)
9.4	Documents to be obtained from Local Government Authorities: Certificate of ownership Certificate of non vesting Street line Certificates (only if applicable) Building line Certificate Notice of Rates Assessment (current year) Receipt for payment of Assessment Rates for the last quarter of current year.

If any Pradeshiya Sabha does not issue the above certificates please obtain a certificate stating that the above are not applicable. This certificate should not be older than 6 months. If sub-division approval is not required a letter to this effect should be obtained by the local authority.

9.5 Access to the property

A rough sketch showing access to the property from the nearest town. If the access road is not a public or common road , the access way should be conveyed by a deed. Access should be depicted in the survey plan. The availability of an access road with a minimum width of 10 feet is necessary.

9.6 If the applicant is a Tamil or Muslim or married under Kandyan Law an affidavit to the effect whether they are affected by General law or any Personal law is necessary.

10. Valuation Report

This should be obtained from an officer in the Bank’s Panel.
Fee payable

Amount of loan	Valuation
Rs. 200,000/-	1000/-
Rs. 300,000/-	1200/-
Rs. 500,000/-	1350/-
Rs. 1,000,000/-	1850/-
Over Rs. 1,000,000/-	2200/-

11. The following documents are also necessary in addition to those indicated above

• A copy of the approved building plan (if approval is not required a letter to that effect from Local Authority)
• Two copies of the Statement of Estimated expenditure (This should be prepared by a Technical Officer)
• Model building plans and all technical instructions are available free from our Technical Services Division. Building plans and building estimates can be obtained from our Technical Services Division for a fee
• In case of purchase of property a letter of undertaking issued by the Vendor
  

12. Release of loan

I. Purchase loans - On receipt of registered Transfer deed and Mortgage Bond , Form 54 and extracts, the loan amount will be disbursed in full. (Transfer deed to be executed by one of our panel lawyers. Mortgage Bond to be executed by our legal officer/panel lawyer)

II. Construction loans - On receipt of registered Mortgage Bond and extracts, the loan amount will be released in installments. Construction work must be finalized within 12 months of the receipt of the first installment during which only interest on disbursed amount are payable

III. Redemption loans - On receipt of registered M.B. & extracts and a letter of undertaking from the relevant institution stating that the original documents in their custody will be released to us after full settlement of loan is necessary.

13. Repayment

Should be made in equal monthly installments on the basis of diminishing capital.

NOTE : The above particulars are details prepared to assist you when applying for a loan. Our institution retains the right of making a final decision in accordance with the general rules and regulations governing such matters as the maximum amount of loan made available, rates of interest, the repayment period , value of security etc. Your application and the other documents can be handed over to any of our Branches. If you require any further details please contact a Customer Services Officer or Branch Manager.

Source: http://www.hdfc.lk/kedalla.asp