CREDAI seeks bank funding for developers to buy land for affordable housing projects

Realtors apex body CREDAI in its budget wish list has demanded that banks should fund developers to buy land for development of affordable housing projects.

It has also stated that the definition of affordable housing should be same across all the legislations.

"Land as a value of the project cost, comprises 40 per cent of the overall project cost. With the advent of RERA, one cannot sell until all approvals are received which means that one needs funding either by way of promoter equity or private equity," CREDAI said in its budget memorandum.

Land funding is typically done by NBFCs or private equities, it said, but added that cost to developers are as high as 25 per cent.

"The support of the banking system is needed to bridge this gap. Funding of land by commercial banks was permitted by RBI until 2008 and should be resumed at the earliest for affordable housing," CREDAI said.

The association, which has over 10,000 developers as members, also pitched for uniform definition of affordable housing.

"Currently, Section 80 IBA of Income Tax Act, GST Act, DEA Notification dated 14.11.2017, Ministry of Housing and Urban Affairs in respect of CLSS and RBI adopt definitions of affordable housing which vary among themselves," CREDAI said.

It suggested that affordable housing definition drawn from CLSS (Credit Linked Subsidy Scheme) should be made universally applicable across all agencies of the government.

Under the CLSS, affordable housing comprises units with a carpet area not exceeding 60 square metres within the cities of Chennai, Delhi, Kolkata and Mumbai, and 120 square metres elsewhere.

CREDAI also demanded that income tax rebate should be enhanced for payment of principal and interest on home loan.