NHB to set up mortgage guarantee firm

National Housing Bank (NHB), the principal agency refinancing housing finance companies, is planning to set up a mortgage guarantee corporation as a joint venture company with international partners to provide risk cover to lenders against defaults in housing loans.

NHB is in talks with the International Finance Corporation (IFC) and the Asian Development Bank (ADB) for the venture.

NHB has set a market borrowing programme of Rs 7,500 crore in financial year 2007-08.

NHB is also planning equity investments in housing finance companies financing rural housing. The minimum investment cap will be around 11%, while the maximum will be 26%.