FAQ's on loans available to NRIs

Q) Can NRIs obtain loans for acquisition of a house/flat for residential purpose from financial institutions providing housing finance?

A) Reserve Bank has granted general permission to certain financial institutions providing housing finance e.g. HDFC,LIC Housing Finance Ltd.,etc. to grant housing loans to non-resident Indian nationals for acquisition of houses/flats for self-occupation subject to certain conditions.

Q) Can authorized dealer grant loans to NRIs for acquisition of a flat/house for residential purposes?

A) Authorized dealers have been granted permission to grant loans up to non-resident Indian nationals for acquisition of house/flat for self-occupation on their return to India subject to certain conditions. Repayment of the loan should be made within a period not exceeding 15 years out of inward remittance through banking channels or out of funds held in the investments' NRE/FCNR accounts.

Q) Can Indian companies grant loans to their NRI staff?

A) Reserve Bank permits Indian firms/companies to grant housing loans to their employees deputed abroad and holding Indian passport subject to certain conditions.

Q) What are the options available for obtaining guarantors while applying for a HDFC/LIC loan?

A) One will need a guarantor for a loan mainly for collateral security. The guarantor will have to demonstrate appropriate net worth to cover for the loan. Usually one can have a guarantor in any city where the loan issuer has a branch. Talk to loan issuers they will work something out for NRIs and foreign banks.

Q) How to avoid granting a Power of Attorney in favor of the real estate developers?

A) One can choose not to grant the Power of Attorney (POA) to the developers. However this will mandate the mailing of all documents to one's foreign residence and associated time delays. A good compromise is to grant the POA to the builder only for specific necessary items.

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