Delhi Development Authority Housing Finance Schemes

The Del­hi Devel­op­ment Author­i­ty’s hous­ing scheme for over 25,000 flats in the nation­al cap­i­tal presents a great oppor­tu­ni­ty for banks to earn some easy mon­ey. No won­der, most banks have rolled out schemes to finance Rs. 1 lakh reg­is­tra­tion mon­ey nec­es­sary to apply for these flats.

The DDA has autho­rised 13 banks to sell appli­ca­tion forms for its res­i­den­tial scheme. These banks are State Bank of India, Pun­jab Nation­al Bank, Syn­di­cate Bank, Union Bank of India, IDBI Bank, Cor­po­ra­tion Bank, Cen­tral Bank of India, Kotak Mahin­dra Bank, Axis Bank, IndusInd Bank, ICICI Bank, Yes Bank and HDFC Bank. Most of these lenders have come out with attract­ing finance schemes.

Here are 10 things to know about these finance schemes:

1) Pri­vate sec­tor banks are charg­ing more for financ­ing the reg­is­tra­tion mon­ey need­ed to apply for a flat. ICICI Bank and Axis Bank are charg­ing Rs. 4,050 to finance Rs. 1 lakh reg­is­tra­tion money.

2) Pub­lic sec­tor banks are charg­ing low­er amount than their pri­vate sec­tor peers. State Bank of India, the coun­try’s biggest lender, is charg­ing Rs. 3,550 for financ­ing the Rs. 1 lakh reg­is­tra­tion mon­ey.Pun­jab Nation­al Bank is charg­ing Rs. 3,800.

3) Some bro­ker­ages, such as SMC Glob­al, are also offer­ing finance for DDA’s hous­ing scheme. SMC Glob­al has tied up with pri­vate lender Kotak Mahin­dra Bank for the finance scheme.

4) Doc­u­ments need­ed for finance: Appli­cants may be asked for proof of res­i­den­tial address, PAN card, iden­ti­ty proof, pho­to­graph, post-dat­ed cheque.

5) How it works: Once you deposit the finance mon­ey (say Rs. 3,550 with SBI), the bank will fur­nish Rs. 1 lakh (on your behalf) towards the reg­is­tra­tion mon­ey with DDA.

6) You don’t need to have a sav­ings account with a pri­vate sec­tor bank to opt for the finance scheme. How­ev­er, pub­lic sec­tor banks may ask you to open a sav­ings account before they extend a loan for the DDA scheme.

7) If you are suc­cess­ful in the draw, but do not want to buy the flat, you can sur­ren­der or can­cel the flat. There is no penal­ty if the can­cel­la­tion is done before the DDA issues a demand let­ter for the pay­ment of your flat.

8) If a suc­cess­ful appli­cant (who has opt­ed for finance) fails to repay the reg­is­tra­tion mon­ey to the bank, the lender can use the post-dat­ed cheque to recov­er its money.

9) Should you opt for the finance scheme: Appli­cants should not choose the finance scheme if they can pay the reg­is­tra­tion mon­ey on their own. The DDA has promised to con­duct the draw with­in three months of the clo­sure of the scheme. Cur­rent­ly, banks offer 7.75–8 per cent for three-month deposits. So Rs. 1 lakh deposit will earn an inter­est of around Rs. 2,000 over three months. If you opt for the finance scheme, you will have to pay near­ly dou­ble of the inter­est earned to banks.

10) The DDA will pay an inter­est of 8 per cent per annum if draw of lots is not held with­in three months. The inter­est will be paid for the peri­od beyond three months after the clo­sure of the scheme.