Due to the overcrowding of city of Mumbai a need was conceived to develop a an alternative, satellite city near Mumbai. This alternative as a counter-magnet to the problem of office concentration at Southern end of Mumbai, known as new Bombay, has helped the government in reducing the over-concentration of jobs in the main city and has thus helped in relocating the population. Government of Maharashtra formed a City and Industrial Development Corporation of Maharashtra (CIDCO), for this purpose. under the Indian Companies Act of 1956. Demand for home loan for CIDCO flats is ever rising due to sale of second-hand flats as well as those allotted by CIDCO under its lottery scheme from time to time. The State Government of Maharashtra had acquired the agriculture land to set up a new town and entrusted the task to CIDCO, as the Development Authority, for development and allotment of the plots/flats under various categories.
What are CIDCO flats?
CIDCO flats refers to all the flats which are situated in the area of New Bombay. Initially CIDCO had ownership rights of all plots in New Mumbai. It allotted some of the plots to builders to construct buildings on it for sale to consumers. CIDCO itself gets flats constructed on some of the plots for sale by it to the ultimate consumer. Home loan for CIDCO flats are available from banks and housing finance companies.
Documents needed for a home loan for CIDCO flats
For grating home loans for CIDCO flats, the lenders generally insist on some sets of documents. The first set of documents comprises of the usual Know Your Customer (KYC) documents for the purpose of establishing the identity of the borrower and his address proof. For identity purpose you can submit any document issued by a government or government authorities, with your photograph printed on it like PAN card, Aadhaar Card, Voter ID and driving licence etc. The other part of KYC documents comprises documents related with the address for place of residence. Any document which has name and address of the borrower on it is acceptable to the lender. For this purpose you can submit utility bills like electricity bill, landline phone bills. You can also submit property related documents like leave and licence agreements, house tax receipt, purchase agreement of the property etc. for establishing your place of residence. Some of the documents like Aadhaar card, Driving licence and voter ID can be used for both the purposes.
The other set of documents are needed by the lender about the repaying capacity of the borrower. The repayment capacity can be established with the help of documents like salary slip/form no. 16/copy of the ITR for salaried. For self employed people documents like copy of the ITR, certified copy of the profit and loss account with balance sheet are needed in addition to documents for place of business as well as registration of the business under any prevailing law. The most important part of the documents for home loan for CIDCO flats are documents related with the property proposed to be purchased. The buyer has to submit the chain of documents in respect of the property with No Objection Certificate (NOC) from the housing society/CIDCO for mortgaging the property with the lender. Regarding the flats constructed by a builder on the land allotted by CIDCO, the borrower has to submit the copy of the approved plan and NOC from builder/CIDCO for mortgaging the flats with the lenders. For new flats allotted by CIDCO under its lottery scheme, you will have to submit the copy of the allotment letter to the lender with NOC. If the conveyance has not been done in respect of the land, the borrower has to obtain an NOC from CIDCO.
Eligibility for a home loan for CIDCO flats
Since the flats in the new Mumbai are generally as per the approved plans and on the land owned by CIDCO, you would not face much problem in getting the loan as long as your personal details and income documents are in order. You can avail home loan maximum upto 80% of the property. The lenders generally treat anything between 40% to 50% of your monthly income being available for servicing the home loan and your home loan eligibility in terms of amount is determined accordingly. The home loan eligibility for CIDCO flats can be enhanced by making your earning parents or children join you as co borrower. A few of the banks let you add your siblings also as co-borrower to enhance your home loan eligibility on case to case basis. The eligibility can also be enhanced by opting for longer tenure home loan. The tenure of the home loan is also restricted by the remaining life of the property at the time of end of the loan tenure. Since the flats in CIDCO are newly constructed, one should not face any problem in getting home loan for CIDCO flats of longer tenure. The standard tenure for a home loans is 20 years but some lenders who grant you a home loan upto 40 years provided the property to be financed has remaining life at least equal to the loan tenure.
Interest rate on home loan for CIDCO flats
The rate of interest applicable on your CIDCO home loan is on a floating rate basis. However, the methodology to calculate the floating rate differs between banks and housing finance companies. The banks are mandated to lend for home loans on the Marginal cost of Fund based lending rate (MCLR) which depends on the cost of marginal borrowing of the banks and reflects the interest rate prevalent in the market at that time. No bank can give a home loan below its MCLR. The housing Finance Companies lend on the basis of the Retail Prime Lending Rate (RPLR) and the actual rate of interest charged on home loan is generally at a discount to the RPLR.