As housing finance companies are having easier access to overseas funding, loans for low-cost housing will be provided at lower rates.
The National Housing Bank (NHB) is drafting guidelines to put a cap on interest rates for affordable housing loans, which will be financed through overseas funding, according to Mr. R.V. Verma, Chairman and Managing Director of NHB.
"The interest rates under the affordable housing segment will be closely monitored. They will work out to be lower than the normal lending rates. The guidelines on the cap on interest rates will be out in a week's time," Mr. Verma said.
To ensure that the benefits of raising cheaper overseas funds are transmitted to the end consumer, NHB would be monitoring the loan pricing and property prices offered by the HFCs and developers respectively.
"We will have a monitoring and reporting mechanism on the interest rates charged on loans given for affordable housing from the money raised via the ECB route," Mr. Verma added.