House Building Advance (HBA) for Indian Railway Employees

HBA is admissible to :

 A Permanent railway employee or a temporary Railway employee with 10 years of service.
 Officers of all India services (IAS, IPS, IFS) on deputation to the Railways continuously for 6 years.
 If both Husband and wife are Railway employees, advance is admissible to any one of them. Where a house-site is owned jointly by husband and wife, amount will be sanctioned only if both agree to mortgage the same to Government.
If both Husband and wife are Government Servants, the pay of both of them will be taken into consideration for calculating the ceiling limit.
A Railway employee under suspension may be granted HBA on furnishing collateral security in the shape of mortgage bond from two permanent Railway employees.

HBA is granted for the following purposes:

Purchase of a plot for construction of a house.
Construction of a house on a plot already owned by a Railway employee or jointly with his/her spouse.
Enlargement of an existing house.
Purchase of a ready built house of flat.
Repayment of loan taken from Govt/private sources for constructing a house.

Cost ceiling

 134 times pay in Pay Band subject to a minimum of 7.5 Lakh and maximum of 30 Lakhs.

Amount of Advance

34 times the Basic Pay + Grade Pay or Rs. 7,50,000 or the actual cost or repaying capacity whichever is less.
For enlargement of an existing house, 34 times the Basic Pay + Grade Pay or Rs. 1,80,000 or the actual cost whichever is less.
In case of construction of a house in rural area, the amount of advance is 80% of the actual cost of construction and land.
For purchase of plot/land and mount not exceeding 20% of advance in case of single storied and 15% in case of double storied is permitted.

Rate of Interest


Upto Rs. 50,000                 5%

Upto Rs. 1,50,000             6.5%

Upto Rs. 5,00,000             8.5%

Upto Rs. 7,50,000             9.5%

Penal interest of 2.5% for violating conditions.
0.5% reduction for promoting small family norms.
Rate of interest prevalent on the date of release of advance/first instalment shall be applicable.
Recovery

Principal               -    180 months

Interest                 -    60 months

Purchase of land and construct house – The following month of completing construction or 24 months after granting first installment whichever is earlier.

Construction of house – The following month of completing construction or 18 months after granting first installment whichever is earlier.

Source: http://indianrailwayemployee.com/content/house-building-advance-hba