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NRIs are recognised under the Foreign Exchange Regulatory Act, 1973. Every financial institution in India follows the RBI guidelines that define an NRI as - "An Indian citizen who holds a valid document like Indian passport and who stays abroad for employment or for carrying on business or vocation outside India or stays abroad under circumstances indicating an intention for an uncertain duration of stay abroad is a NRI."

Home loans for NRIs are available for the construction of new residences, purchase of old houses/flats, repairs/renovation/alternations etc. NRIs can also avail of loans by mortgaging an existing residential property. However, basis the Income Tax Act an NRI should have stayed in India for a period of 182 days or more (within an assessment year) or they should have stayed in India for at least a total of one year or more

The FDI Policy that permits FDI up to 100% from foreign/NRI investor under the automatic route has boosted NRI confidence. Furthermore banks have attractive NRI housing schemes as well

To qualify for an NRI Home Loan, you need to meet any one of the following criteria -

  • Indian citizens who stay abroad for employment or for carrying on business or vocation outside India.
  • Indian citizens who stay abroad under circumstances indicating an intention for an uncertain duration of stay abroad.
  • Government servants who are posted abroad on duty with Indian missions.
  • Officials deputed abroad by Central/State Governments and Public Sector undertakings on temporary assignments or posted to branches or offices abroad.
  • Indian citizens working abroad on assignments with foreign Governments or regional/international/multinational agencies like UN organisations, the World Bank etc.
  • Non-Resident foreign citizens of Indian origin are treated on par with NRIs.

NRIs should be diligent and select a proactive home loan provider (or HFC) given the geographical distances and frequent travel constraints involved.

HOME LOANS

The eligibility criteria of NRIs differ from resident Indians

Age & Education

The loan applicant has to be a graduate and at least 21 years of age.

Income

The loan applicant has to have a minimum monthly income of $2,000 (although, this may differ across HFCs). The eligibility is also determined by the stability and continuity of employment/business.

Payment options

The loan applicant to route the EMI (Equated Monthly Instalments) cheques through a NRE/NRO account only.

Number of dependants

The eligibility of the applicant is also determined by the number of dependents as well as assets and liabilities.

  • An NRI applicant is eligible to get a home loan ranging from a minimum of Rs 5 lakhs to a maximum of Rs 1 crore.
  • An applicant will be eligible for a maximum of 85% of the cost of the property or the cost of construction as applicable and 75% of the cost of land in case of purchase of land, based on the repayment capacity of the borrower.
  • An NRI can enhance his loan eligibility by applying for home loans with a co-applicant who has a separate source of income.
  • The rate of interest for home loans to NRIs is higher than those offered to Resident Indians. The difference is to the extent of 0.25%-0.50%.
  • Some HFCs also have an internally earmarked 'negative criterion' for NRI home loans. As such, the NRIs who hail from locations that are marked as 'negative' find it difficult to aquire a home loan.
LOAN ELIGIBILITY

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