There will be no ceiling on the number of beneficiaries under the Interest Subsidy Scheme for Housing the Urban Poor (ISHUP) and banks should extend liberal credit to ensure its success, said Dharmendra Pratap Yadav, Managing Director, Tamil Nadu Housing Board (TNHB).

Speaking at a meeting with bankers of Tiruchi and neighbouring districts to discuss the modalities of the implementation of the scheme here on Wednesday, Mr.Yadav said the objective of the Centrally-sponsored scheme was to ensure affordable housing for economically weaker section (EWS) and low income groups (LIG) by extending loans with interest subsidy for construction or purchase of new houses. The TNHB is the nodal agency for implementing the scheme in Tamil Nadu.

The income limit for beneficiaries from the EWS category has been raised to Rs.5,000 a month and for LIG category beneficiaries the monthly income should be between Rs.5000 and Rs.10,000. The raising of the income limit should help cover a large number of people in urban areas, including those in town panchayats limits, Mr.Yadav said. With Tamil Nadu being a highly urbanised State, there was huge scope for covering a large number of people under the scheme.

Beneficiaries or their spouses should not own a house for availing the scheme. They should have a plot for construction of house. For those under the EWS category, a loan of up to Rs.1 lakh would be extended for constructing a house with a minimum area of 25 square metres. For LIG segment, the maximum loan would be Rs.1.60 lakh for building a house with a minimum area of 40 square metres. However, the interest subsidy for LIG segment would be provided only for a loan amount of Rs.1 lakh. The term of the loan would be 15-20 years. A five per cent subsidy would be extended on the interest payable on the loans over the full period of the loan.

The interest subsidy would be paid to the bankers upfront through the National Housing Bank (NHB) and the Housing and Urban Development Corporation Ltd (HUDCO). Banks would have to deduct the subsidy from the loan amount from the beginning itself and this would ensure substantial financial benefit for the beneficiaries, Mr.Yadav said and added that beneficiaries would benefit to the tune of about Rs.30,000 under the scheme.

He appealed to the bankers to extend adequate funding to the beneficiaries, without restricting to the limits fixed, so that quality assets were created and there was no problem in repayments.

Mr.Yadav had extensive interaction with T. Soundiah, Collector, Christopher Robin, Regional Manager, National Housing Bank, Chennai, G.K. Ramakrishnan, Chief Engineer, TNHB, S. Shanthi, Regional Director of Municipal Administration, M. Jayapal, Executive Engineer, TNHB, Tiruchi, and bank officials from Tiruchi, Karur, Pudukottai and Perambalur districts on the implementation of the scheme. Some of the bank officials suggested that the stamp duty and registration fee for mortgage registration be waived for beneficiaries of the scheme.