Loan Help

If you are a NRI, acquiring a home loan in India can be a complicated and confusing process. Go through the following information to understand the process of receiving a home loan.

Non-Resident Indian categories who qualify for NRI housing loans

• Indian citizens residing abroad for employment, business, or any indefinite purpose.
• Government servants posted abroad with Indian missions, drawing salaries from Government resources.
• Officials deputed abroad with foreign governments or agencies like the World Bank, IMF, WHO, ESCAP.
• State Government or PSU officials on temporary assignments abroad.

Home loans are available for construction of new houses/flats, purchase of old houses/flats, additions/alterations to existing residences, repairs/renovation, etc.

NRIs can avail of loans by mortgaging existing residential property. Eligibility includes staying in India for 182+ days in an assessment year or at least 1 year in total.

Attractive NRI housing schemes are offered by banks and HFCs, while the FDI policy permitting up to 100% investment under the automatic route boosts confidence. It’s important to choose proactive and responsive HFCs considering geographical distances.

Eligibility Criteria of NRIs for Home Loan

• Age: Minimum 21 years old.
• Qualification: Must be a graduate.
• Income: Minimum monthly income of $2,000 (varies across HFCs); stability of income is also evaluated.
• Payment Options: EMIs must be routed through NRE/NRO accounts only.
• Dependents: Eligibility is affected by number of dependents, assets, and liabilities.

Eligible loan amount ranges from ₹5 lakhs to ₹1 crore, depending on repayment capacity and property cost.

Loan tenure allows up to 85% of property cost or construction cost, and 75% for land purchase. Co-applicants with additional income may boost eligibility.

Interest rates for NRIs are 0.25%–0.50% higher compared to resident Indians. NRIs from “negative” locations per some HFCs may face difficulty obtaining loans.

RBI Directives for Home Loans

• Loan amount should not exceed 85% of dwelling cost; remaining 15% must be own contribution.
• Own contribution must come via standard banking channels, NR(E), or NR(O) accounts.
• Repayments must also be routed through NR(E) and NR(O) accounts under FEMA norms.
• Most HFCs consider NRI loan feasibility favorable, given their economic stability.

Documentation Required for NRI Home Loans

Required documents differ from resident Indians’—NRIs also need passport copy, work contract, and above all, Power of Attorney (POA) for representation in India.

• Passport & Visa
• Appointment letter / employment contract
• For Middle East: Labor card (translated & consulate-countersigned), salary certificate in English
• For Salaried: Visa + passport copy, salary slips, contract
• For Self-Employed: Passport & visa, business profile, trade license, audited income documents
• Property Documents: Title deeds (last 13 years), encumbrance certificate, sale agreements, receipts, approved plans, clearance orders, tax receipts.
• PIO Applicants: PIO card or passport/birth/marriage certificate establishing Indian origin.

Before construction begins, necessary permissions and approvals from respective authorities are mandatory to avoid litigation.