Axis Bank, India’s third largest private sector bank announced the launch of ‘Asha Home Loan’, a 30 year home loan product for first time home buyers in the lower income segment based on the family income.

Marking the bank’s 20th Anniversary, the ‘Asha Home Loan’ product will offer loans to customers with family income of Rs 8,000 - 10,000 per month and above. “The customers can pool their family income instead of depending on their individual income only. The product offers loans as small as Rs 1 lakh and upto Rs 15 lakh in small towns (population less than 10 lakh) and up to Rs 25 lakh in larger towns (population greater than 10 lakh),” the bank said in a statement.

The ‘Asha Home Loan’ product will be available in both floating and fixed rate options to both salaried and self-employed resident Indians.

“The appraisal methodology has been formulated keeping in mind the profile of this customer segment. Asha Home Loans offers loans up to 90 per cent of the market value of the property,” the statement said.

Jairam Sridharan, Head Consumer Lending and Payments, Axis Bank, said, “We see tremendous potential in the affordable housing segment. The customer segment having lower level of income and aspiring to own their first house in the peripheral areas of Tier1 cities or within Tier II and III cities has largely remained untapped.”

The bank further said that the demand from this segment is largely towards smaller property configurations in order to meet their basic requirement of owning a house, and hence the product enables customers to purchase properties with an area measuring 325 sq ft and above. Loans can be obtained for new, resale, ready, under construction property, as well as for purchasing a plot and constructing a house thereon.

According to the bank, the industry estimates state that there is an overall urban housing shortage of 19 million units, out of which more than 90 per cent of the demand is from the low income group segment and below. Further, on the supply side, limited availability of land in urban areas does not make it viable for developers to provide affordable housing in these locations. Therefore, affordable housing projects are coming up in the peripheral areas of Tier 1 where land prices are comparatively cheaper.

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