It is needless to specify that purchasing a home is one of the most exhausting tasks that anyone can do in its life. From making arrangement for the down payment to paying EMIs for the home loan, buying a home takes everything out from your savings. In India, things become more difficult for people belonging to lower-middle class families. They are the one who has lived their entire life in a rented accommodation. For them, even arranging the down payment is like climbing Mount Everest.
But, merry times are not too far from you as the Indian government has recently approved a proposal by Employees’ Provident Fund Organization (EPFO). With this, members can make use their savings in PF account to buy land, home or apartment. Read this post further to know everything about this move.
What is This EPFO Scheme?
To make affordable homes within everyone’s reach, the Employees’ Provident Fund Organization has given a recommendation to the Labour Ministry to include a “new paragraph 68BD” as a group housing scheme. Under this new scheme, EPFO members can their saving in PF to purchase home, land or apartment. However, the members need to form a cooperative housing society of at least 10 or more to avail this benefit. The PF beneficiaries can not only use their 90% of their saving for this goal but can also use their monthly PF contribution under Employees’ Provident Fund Scheme, 1952 towards repaying their EMIs for the home loan.
Benefits of This New EPFO Scheme
- As many as 50 million people are a part of the Employees’ Provident Fund Organization and are estimated to get benefit under this new scheme.
- Making arrangement for the down payment is one of the most crucial things in the home-purchasing process. But, the EPFO has now enabled its beneficiaries you use their own savings for this purpose.
- Paying EMIs is an added burden for a homebuyer. Things become more complicated when you have invested in an under-construction project as you will have to pay EMIs and monthly rent, simultaneously. This new move can take off some burden from the buyers.
- In addition to purchasing a home, you can use your PF savings to repair your house if you have completed 10 years of service. But, your house must have completed 5 years since its construction.
- The scheme will also help the government in realising their dream of “Housing for All by 2022″ by helping 50 million EPFO subscribers to purchase affordable homes effortlessly.
- Arranging a house is a thing of great challenge for lower middle-class buyers. By providing ready funds for down payments and EMIs, this dream can now turn into reality.
- Despite this fact that numerous people are homeless, there is a pile of housing inventory across most major cities in India. This new scheme will not only benefit the homebuyers but will also prove to be a boon in reviving the real estate sector, which has not seen the sun since last 2-3 years.
All in all, this new EPFO scheme is going to benefit homebuyers, developers as well as the government. While on the one side, the homebuyers will get monetary support, on the other, the builders will see a rise in demand for their low-costs homes.