Min 60% of HFC loans for housing, no prepayment or foreclosure charges: RBI

Lenders must meet 60% ratio by March 2024; loans for furnishing dwelling units to be treated as non-housing loans

The Reserve Bank of India (RBI) on Thursday put out the final guidelines for housing finance companies (HFC) in which it said all such non-banking finance companies (NBFC) should have at least 60 per cent of their net assets deployed in the business of providing finance for housing, and those who still don’t have that ratio, must do so in a phased manner by March 31, 2024. 

HFCs cannot levy foreclosure charges, or prepayment penalties on any floating rate term loan sanctioned for housing loans.  

Out of the total net assets, at least 50 per cent should be loans given