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In a bid to boost affordable housing, the Indian Mortgage Guarantee Corporation (IMGC) has launched a mortgage guarantee-linked home loan product.
“In our attempt to give a leg-up to affordable housing under the Pradhan Mantri Awas Yojana (PMAY), we have launched a mortgage guarantee-linked home loan product for low and moderate income households,” IMGC chief executive Amitabh Mehra told PTI here.
“The product is aimed at both formal and informal sectors, including the self-employed,” he said.
Joint venture
Set up two years ago, IMGC is a joint venture between National Housing Bank (NHB), Asian Development Bank (ADB), International Finance Corporation (IFC) and the US-based Genworth Financial.
It is registered with RBI under the mortgage guarantee norms. It has total portfolio of ₹2,000 crore.
“The product has been formulated and offered by the IMGC for housing finance companies and banks under the PMAY scheme,” Mehra said.
Affordable housing
The mortgage guarantee will add value in terms of default guarantee to lenders and offer higher loan amount to borrowers at longer tenor, including loans beyond retirement extending up to 75 years.
For the lenders, the mortgage guarantee can be used to cover potential defaults, thus help expand the reach of the scheme, he said. Under the mission of housing for all by 2020, the government offers a subsidy to encourage lending to lower segment of the population.
Partnerships
“With the renewed thrust on affordable housing and supportive policy environment, we will be playing an important role in the affordable housing segment,” said RV Verma, the former chairman of NHB who recently joined the board of IMGC.
“With the number of housing finance companies registered with NHB going up to 82, IMGC expects to reach out to the larger market through all these players,” he said. Already lenders such as ICICI Bank, Bank of Baroda, Dewan Housing, Aditya Birla Housing Finance and Axis Bank have entered into a collaboration with IMGC, Verma said.
The institution is also in advance talks with HDFC and other major players for similar partnerships, he added.
The mortgage guarantee will add value in terms of default guarantee to lenders and offer higher loan amount to borrowers at longer tenor, including loans beyond retirement extending up to 75 years.
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