House Building Loan Scheme(HBA) for govt employees: Orders, Circulars and Guidelines

For building houses for govt employees, a new scheme instead of the existing HBA has been introduced. They can take loan from scheduled bank or any public sector bank or any non banking financial institution. Loan interest subsidy would be given to bank. The govt has issued detailed guidelines regarding this. Eligible applicants should contact the bank in person. It is advisable to avail of the loan from the bank with salary account as the loan interest subsidy is credited to this account or the salary account can be shifted to the bank from where the loan is to be processed. 


Govt employees and teachers with 5 years of completed service and 50 months of service remaining (as on March 31st) are eligible to apply. This is not applicable to part time service, aided school service, board, company, corporation and university employees. Also the applicants having a house in their own name or husband / wife / (major) children are exempted from this previlege. If the employee or husband/wife has availed of loan already from the government, they would not be eligible to apply. 50 times of basic salary would be alloted as loan to the maximum of Rs.20 lakh. The govt employee couples can apply for loan independently or conjointly. Still, the maximum amount remains the same. The property in the name of the employee or his/her partner only would be considered for house building loan. This is sanctioned for building house or buying plot/house/flat only. 

Selection of banks 

The suitable bank for applying loan can be done after visiting more banks in person or talking to other such loanees to enquire more about the scheme. 

Interest rate 

There may be difference in the rate of interests in banks. The two types of interests are floating and fixed. There would be same rate of interest from the beginning to the end for fixed interest besides there is zero impact of the changes in the financial sector unlike that of floating interest. Though the bank would take high rate of interest in the case of increase in interest rate, care should be given on whether it reflects in the repayment of loan when there is a decline in the interest rate. Some banks may demand request and fixed fee for this. 

Peculiarities of new loan scheme 

This scheme is only for those who haven’t had the facility of HBA early and it is of the ‘first come first get’. Weightage will be there as per the remaining service period. The processing of this will be through a new and specially made software for this. The govt would inform the amount of loan that can be sanctioned each year. 

Loan Amount 

The loan amount that can be sanctioned is 50 times of basic salary, to the maximum of Rs.20 lakh. There would be no rate of subsidy in the interest for the amount exceeding this limit. 

No Objection Certificate 

To sanction the loan amount, the applicants must get NOC from the Finance dept through DDO and submit it in the bank. The details of the same be entered in the service book too. The DDO concerned should intimate the details of the loan sanctioned to the Finance dept and entry be done in SPARK and in the website exclusively for this purpose. The Finance dept would forward the eligible rate of interest to the salary account along with the salary. 

Circulars and orders, Terms and conditions regarding this and application for NOC can be downloaded from the link below.
House Building loan Scheme(HBA) for govt employees: Orders, Circulars and Guidelines-PDF Hand Book(Malayalam) Prepared by Robin Samuel
GO(P)NO.105/2018/FIN dated 05-07-2018
GO(P) No 143 - 2018-Fin dated 11-09-2018
GO(P) No 150 - 2018-Fin dated 25-09-2018
GO(P) No 166 - 2018-Fin dated 26-10-2018
Circular No. 6/2019 fin dated 18-01-2019
GO(P)NO .53/2019/FIN dated 03.05.2019
HBA Notification 2020-21
Terms and Conditions of the Scheme
Application For NOC
No Objection Certificate (NOC)
HBA-Frequently Asked Questions

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