EPFO Affordable Housing Scheme
EPFO or Employees’ Provident Fund Organization – the body which maintains retirement funds in India has announced that starting March, 2017, it will be launching its very own housing scheme. The twist here is that the scheme will be limited to only and only EPFO members. Others who are not EPFO members will have no access to this scheme. This means that only 4 crore Indians will be allowed to avail the benefits of the scheme.
The salient feature of this scheme is that people can actually go ahead and pay for their homes using the balance they have in their EPF accounts. The money in EPF account can be used only for:
- Money can be used towards the down payments to be made for property purchase.
- Money in EPF account can be used for paying EMIs for the property.
According to an unknown source, the scheme will be launched by EPFO only after March 8 when the voting in 5 states are completely. As per the source, what EPFO will do is that it will act as a facilitator and those who are EPFO members will be provided support during property purchase. Only catch here is that the EPFO member opting for this housing scheme from EPFO needs to be in-service. This means that the scheme is not designed for those who are either at the brink of retirement or those who have already retired.
It is expected that under group housing society, there will be a minimum of 20 members who will like to use this facility provided by EPFO.
Though not very clear, the source did state that the EPFO members will be allowed benefits clubbing of various center-run and state-run schemes such as PMAY or Pradhan Mantri Awas Yojana under this housing scheme that EPFO will be launching. According to the source, benefits-clubbing will actually help the central government to quickly achieve its ‘housing for all’ target.
This housing scheme has been designed for extending help to the workers from formal sector. What really will happen is that EPFO will be providing a certificate to those workers, which will indicate that the person possessing the certificate has the ability to repay housing loan. The certificate thus issued by EPFO will be considered as a certificate of credit worthiness.
However, the source who provided this information did clarify that in case of a legal dispute, EPFO will remain outside the arena and the legal complications are to be dealt only by the group housing society with either the seller or the builder or the banker – whoever be the second party in the legal dispute.
If the group housing society’s executive head makes a request, EPFO will, in the event of a legal dispute, stop all EMI payments or the down payments until the dispute has been resolved or until the executive head requests to reopen the payments.
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