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1. NRI Home Loans

2. How NRI Home Loans Is Different From That Of
Resident Indians?
Owning a home is a dream for
most of us and thanks to the
diverse home loan schemes
available to make that dream a
reality. How is this different in case
of Non- Resident Indians (NRI)? Is it
equally easy for them to obtain a
home loan and own the property
of their choice? NRI home loans
are now easily available in India,
subject to fulfilment of certain
conditions.

3. NRI Status
Before getting into the details of a home loan for NRIs, it is essential to
understand just who is a non resident Indian. All banks and non-banking
financial companies (NBFCs) go strictly by the definition of NRI as
adopted by the Reserve Bank of India. Under the RBI definition, any
citizen who holds a valid Indian passport and stays out of India for
employment or business spending less than 182 days in India in one
financial year is deemed as a NRI. So before applying for a home loan
under NRI category, make sure you qualify for a NRI home loan keeping
in view the minimum number of days to be spent away from India.

4. Properties eligible for loan
There is not much of a difference when
it comes to the properties on which
home loan is available to NRIs. Like
their resident Indian counter parts,
NRIs can apply for a home loan in case
they are seeking to purchase a
residential property including an under
construction property or resale as well
as for self-construction on a residential
plot of land anywhere in the country.
NRIs can also avail home loans for
purchasing a plot of land as well as to
renovate any existing property in India.

5. Maximum Loan Available and Eligibility Criteria
While banks and non-banking financial companies are free to use their
discretion in offering the maximum loan amount for NRI home loans,
there is not much difference in deciding maximum amount of loan
compared to Indian residents. Usually NRIs can expect a maximum loan
amount ranging from 75-80 per cent of the total market value of the
property. There is however a difference in which banks or NBFCs
calculates the maximum loan amount for NRIs.

6. Some banks use the gross monthly income of the NRI as a yardstick
offering up to 40 times the gross monthly income as the maximum home
loan amount. Other banks use net monthly income as their defining
yardstick limiting a certain percentage of net monthly income as a
deciding factor.
Unlike resident India, NRIs seeking a home loan need to pass through a
tough screening pattern when it comes to home loan eligibility. Only
graduate NRIs are offered home loans and people with no degree or less
educational qualifications than a master degree are usually screened out
or declined a home loan. Banks take into account the minimum annual
salary as a yardstick to approve or decline home loans.

7. Tenure and Interest Rates for NRI Home
Loans
Unlike resident Indians who can get
maximum home loan tenure of up to 30
years, NRI home loans have a shorter
tenure period with a maximum tenure
range of 10 to 15 years. Banks can
however extend the tenure beyond
their maximum tenure range at their
own discretion for special cases. The
interest rate charged by banks for NRI
home loans comes with a slightly higher
interest rate compared to home loans
for resident Indians. The interest rate
for NRI home loan ranges from 0.25 to
0.75% higher than the existing interest
rates for resident Indians.

8. Documents required:
The documentation required for NRI home loans is different from
resident home loans. Documents normally required are copies of the
passport, valid visa and work permit, contract of employment, work
experience certificate, salary certificate and statements of NRENRO
accounts. For those residing in the Middle East, copy of employment card
is also required. Salary certificate should be attested from the embassy if
the salary is not getting credited to a bank.

9. Home loan Repayment:
The down payment for the NRI home loan must be done through a
direct foreign remittance through available banking channels. A
NRI must transfer the down payment money either through his
NRE or NRO account as per the case. NRIs must facilitate the EMI
towards home loan repayments, interest rates, penalty or other
charges only through Non-resident External (NRE) or Non-resident
Ordinary (NRO) accounts.
Source: http://www.realtybonanza.com/blog/nri-home-loan-different-resident-
indians/

10. Thank You…

11. To know more visit: https://www.hdfc.com/NRI/ME/housing-loans/home-loans/for-new-homes-salaried
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