NRI Home Loans Basics and Process

NRI Housing Loans a product which best suits for Non Residents who are dreaming about having a own house in their home town. It is the product which offers all the NRI to purchase a New or Resale property or to built a house in the plot which already they own or to buy a plot and construct a house on it. This product is limited to the NRI people who are salaried only. There are very less banks which take self employed NRI into consideration for funding to their needs.

The process for having Housing loans being a NRI is very simple. The banks will have a General power of Attorney which should be Notarized in the country where the customer is residing and send it across to the bank for submission. The lists of documents are same as salaried residents for the loan process. A NRI person need to submit his/her ID, Age, Residential, Income, Tax deduction, banking proofs to the banks along with the credit report all which are duly signed by the applicants. The credit report is same as CIBIL statement here in India. NRI need to assign a blood relative as his GPA holder to process the loan application and to sign on behalf of him on all his loan documents. A GPA holder can be a father, mother, brother, sister, father in law, mother in law and the final option is a Brother in Law. One cant keep his friends as his GPA holder for his loan processing. The GPA holder also needs to submit his ID, Age and residential Proofs and the property documents with Agreement of Sale and link documents.

The banks will verify employment of the NRI through email mailed to the HR of the company. There will be no further verifications of NRI and the bank will verify the GPA holders address and details here in India. The eligibility will be calculated taking his/her gross/net Income into consideration along with age and the product which the customers choose. If any discrepancy found in the credit statement of the GPA holder will affect the process so it is suggestible to the customers to be aware of ones credit history before making him/her as GPA.

Banks will verify the legality of the property and evaluate according to the market value. The funding will be done up to a maximum of 80% of the property cost (Technical Value), Agreement value or the sanctioned amount whichever is less.

The below points to be noted in the home loan process for NRI’s especially

  • GPA holder is mandatory for processing a home loan application for a NRI.
  • Maximum age of GPA should not cross 75 Years
  • Maximum age considered for NRI is 58 Years
  • All the repayments are given at a maximum period of 15 years
  • Funding will be released ones documents gets registered on the applicants name.
  • For semi-finished apartments and houses the funding will be released depending on the construction stage of the property.
  • Funding will be done for properties with in the geo limits of the bank.
  • GPA notary is mandatory in the residing countries which in turn to be validate din INDIA.
  • TAX Benefit is not applicable for NRI’s on any type of loans.

16 thoughts on “NRI Home Loans Basics and Process

  1. Hi
    Your blog is indeed very helpful.
    I had a query on my home loan and was hoping to get some guidance from you:

    I have recently got a Home Loan sanction from a Bank for a property situated in Bangalore. I am a resident of UAE and am therefore required to execute a GPA in favor of a relative to complete the documentation formalities pertaining to the Home Loan.
    I want to execute the GPA in favor of my Father, who is residing in Cochin (Kerala). My query is, can the GPA be adjudicated in Cochin instead of Bangalore? Will there be a problem in availing the loan if the GPA is adjudicated in a city other than the property location? Also, what are the adjudication charges he would have to pay in Cochin/ Bangalore?

    Thanks in advance

    1. GPA holder is one point contact of the NRI on behalf of NRI he will sign the documents and all future communication will be done to him if in case any payment detailed happens etc. So if you want to execute a GPA on your father’s name who is residing in Kerala then bank do not accept it as the property is in bangalore. You need to execute the GPA on the person who is residing in Bangalore and who inturn is your blood relative.

  2. Hi,

    The post was really helpful. I have executed general POA of Axis Bank in favour of my mother. Now, Can my mother sign the agreement on my behalf and register it too with the registrar?

    Many thanks for the help

    Kind Regards,
    Sonu

    1. The general power of attorney is for producing the documents of your registration in sub registrar office on behalf of you. You only need to sign the documents of both agreement and registration.

  3. I have applied for a home loan for 35 lacs where in the property cost is 54 lacs. I have paid a sum of 5 lacs as advance but the bank is asking me to show that i have paid complete amount through bank. Is it mandatory to show the transaction before disbursement of loan from the bank. What if bank doen’t release fund after the payment of margin money to the vendor. Will the bank give me any guarentee for the loan amount disbursal. Please let me know.

    1. The reason why Banks ask for the margin money receipt through banks is to avoid the unnecessary funding towards any property and to avoid money laundering if any. The RBI has strict guidelines to the bank in terms of Home loans. The sanction letter which bank provides you before disbursement is the conformation from the bank end that you got the loan approved. Please check with legal and technical clearances of the property to avoid the consequences which may arise due to non-disbursal of the loan amount.

  4. Hi Iam an NRI living in US. I want to apply for home loan through SBI.

    They replied :
    kindly download the SBI NRI Housing Loan application from the http://www.statebankofindia.com
    we need all your documents mentioned in the site notorised from local authorities.

    list of documents in brief
    id proof , adress proof, salary slips, bank statements, offer letter, visa copy, work permit copy, three photographs, credit opinion report, if tax statements any, filled up application form, power of attorney papers, agreement of sale.
    if you do not have SBI saving account, kindly send account opening form for opening savings account.

    They have asked me to send the documents notarized. Can you please enlighten me. Notary for POA, Home Loan Form and Savings Account form and what more docs we have to notarize(please reply in detail)

    1. Usually banks ask to notarize Agreements of Sale, Power of Attorney, HL form and Saving Account Form and if required bank statements. Notary on these documents are enough to process the application.

  5. iam NRI residing in UAE from past 2 years..i wanted a home loan in Bangalore..on property..how can I get the loan pls let me know .

    1. For availing a home loan you need to provide General Power Of Attorney(GPA) to any of your blood relative who can complete the whole process. The GPA holder will sign all the home loan related documents on behalf of you. You need to send your income details and personal details of UAE along with the property documents. The whole process will take a maximum of 15 days to complete if provided all the required documents at once.

  6. Me and my brother who is an NRI wants to buy a flat in noida. Brother will pay his part and i need to take loan for my part. So as per bank agent i need to get a GPA from my brother in bank format attested in embassy and need to register it here in India through district megistrate. But as per format it should be notarised. So i am confused why it should be registered and as per agent it would cost me around 7000Rs for registration. Kindly suggest whether it is necessary to register for loan or not and if it is necessary then what would be the expense and what is the procedure

    Thanks

    1. In any NRI home loan they should give GPA to any blood relative in India who can complete the process on behalf of them. The GPA should be notarized there and validated in India through district magistrate then only it will have the validity in India. Please cross the with District Sub registrar office on the amount for the validations.

  7. Dear sir

    I am going to take NRI home loan from Chennai but my own property for assessts liability in Nagercoil. Will they accept the documents?, Is there any attestion require property documents.

    Thanks & regards
    Jackson

    1. If you want to take property in Nagercoil then contact any bank in Nagercoil who can easily process the case as the property is with in their geo limits. Banks will not consider the property which fall out of their geo limits

  8. hello Sir/madam,
    i am an NRI residing in USA, i have given the Special GPA (notarised in my USA) to my mother in india which is stamped in sub-registrar office on a Rs200 stamp paper ( not registered with my photo). Now i have a plan to sell the house, can i do that with my mother as GPA ( in GPA i have included a section as i give full power for my mother to sell).
    Please advise/

    thank you in advance
    Mohan

    1. Yes you can sell the property by giving the rights to your mother but all the sale documents must be signed by you only. With the GPA she can go to Sub registrar office and sign the documents there on behalf of you but not the deeds related to the sale.

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