Home loan on a MHADA flat: the NOC, the papers and the subsidy

Can you get a home loan on a MHADA flat?

Yes, you can get a home loan on a MHADA flat, and the one extra step is MHADA's NOC for the mortgage loan. A flat allotted by MHADA, the Maharashtra Housing and Area Development Authority, stays on the record of its regional board. In Mumbai that is the Mumbai Housing and Area Development Board (the Mumbai Board).

Before a bank takes the flat as security, it needs MHADA's written consent, which the owner applies for. The Mumbai Board's affidavit template has the owner state that "the said bank needs a NOC from MHADA Authority."

There are two routes to that NOC:

Lottery winners: the home loan NOC in the IHLMS 2.0 app

Lottery winners get the home loan NOC in MHADA IHLMS 2.0, the app MHADA says it uses for every step after the draw up to possession. MHADA's lottery FAQ gives the steps:

1. 1Open the MHADA Lottery app and log in to MHADA IHLMS 2.0.
2. 2Go to the menu and select Application List.
3. 3Choose the winning application and tap Apply for NOC.
4. 4Fill in the required details and submit.
5. 5Tap Download NOC and give it to your bank.

Lottery winners do best to start the bank paperwork as soon as they have chosen a bank. MHADA's FAQ says the first 10 percent is due within 30 to 45 days, as the Provisional Offer Letter sets out, so an early start keeps the payment schedule comfortable.

If you decide on a different bank, MHADA's FAQ allows a fresh NOC application once you cancel the NOC you submitted earlier. Our guide to MHADA NOCs online covers the app alongside the Mumbai Board's other NOCs. Stuck in the app? Send us a screenshot on WhatsApp and we will tell you the next step, free.

Owners and resale buyers: the MHADA NOC for a mortgage loan (Form 4)

Owners and resale buyers get the MHADA NOC for a mortgage loan by applying to the Estate Manager on the Mumbai Board's Form 4, a notified service with a limit of 12 working days. The applicant is the person the Mumbai Board allotted the flat to, or in whose name it has been regularised. The form names the financial institution, meaning the bank or housing finance company, that will lend.

Form 4's own checklist asks for four things:

1. 1A self declaration in the format MHADA prescribes.
2. 2A no dues certificate from any earlier lender, where a loan was taken on the flat before.
3. 3Certified copies of the receipts for all arrears and the current month, including ground rent and non agricultural assessment.
4. 4The allotment letter, and where the flat has changed hands, the receipts for stamp duty paid on every change. Our guide to the MHADA allotment letter covers a lost one.

Form 4 also lets the competent officer ask for further papers where a case needs them.

The affidavit template published with Form 4 gives three reasons for the loan: renovating the flat, paying off a previous lender, or paying the balance to the seller. In it the owner undertakes to be solely responsible for repaying the loan, not to sublet the flat until it is repaid, not to mortgage it to any other lender, and not to issue a NOC to anyone else against the flat until the loan is cleared.

Can you get a home loan on a MHADA resale flat?

Yes. A home loan on a MHADA resale flat is possible, and the Mumbai Board's forms point to the buyer being on its record before the loan NOC. The affidavit lists paying the seller as a reason for the loan, yet it is sworn by the person MHADA has allotted the flat to, which suggests the transfer should be on record first.

Plan the MHADA flat transfer and the home loan as one timeline. Our guide to MHADA flat transfer has the transfer fees, the Mumbai Board's checklist and the 23 working day limit. Our guide to buying a MHADA flat in resale has the checks to complete before a token.

The MHADA home loan procedure, step by step

Getting a NOC from MHADA for a home loan, the core of the MHADA home loan procedure, takes five steps for an owner or resale buyer:

1. 1Choose your lender and get its sanction terms, because Form 4 names the lender.
2. 2Clear the Mumbai Board's dues and collect the receipts, including the current month.
3. 3Get a no dues certificate from any earlier lender, if the flat was mortgaged before.
4. 4File Form 4 with the Estate Manager for your division, with the self declaration, the allotment letter and the stamp duty receipts for every change of hands.
5. 5The Mumbai Board decides within its notified limit, and you hand the NOC to your lender.

MHADA's citizen portal says new E-MITRA registrations and services moved to Aaple Sarkar from 1 April 2019, so check there whether the service can be applied for online.

The Mumbai Board's table in MHADA's notification of 13 July 2015 names two appellate officers for this service: the Executive Engineer first, then the Joint Chief Officer.

We prepare this file against the Mumbai Board's own checklist. Send us the flat and your bank on WhatsApp and we will tell you what is missing, free.

What is the MHADA home loan interest rate?

There is no MHADA home loan interest rate: MHADA gives the NOC, and your bank or housing finance company sets the rate on the loan, as it would for any other flat. Rates change, so compare lenders' current rates on the day you apply rather than relying on a figure in an article. What MHADA does shape is the paperwork and the timing, and a ready Form 4 file lets you take the best offer without waiting.

MHADA does not publish a separate home loan calculator, because a MHADA flat's EMI works like any other loan. Our home loan EMI calculator works out the EMI for any loan amount, rate and tenure, and the full cost of the flat once duty, registration and interest are added.

Can you get the PMAY interest subsidy on a MHADA flat?

You can get the PMAY interest subsidy on a MHADA flat when your family and the loan fit the scheme's limits. The Interest Subsidy Scheme of Pradhan Mantri Awas Yojana (Urban) 2.0, the central government's urban housing mission run by the Ministry of Housing and Urban Affairs, sets these terms:

Three more checks matter before you count on it:

• ·Your family owns no pucca house anywhere in India.
• ·No earlier owner has claimed the subsidy on this flat, because it is given only once for a property.
• ·You have not been allotted a house under a central, state or local government scheme in the last 20 years. Paragraph 3.2 may cover a MHADA lottery allotment, so confirm your eligibility on the PMAY-U 2.0 portal before counting on the subsidy. A resale buyer is not caught by this rule through the flat they are buying, though any other scheme allotment in the last 20 years still counts.

How to register for PMAY on a MHADA flat

The PMAY-U 2.0 guidelines set out the route:

1. 1Check eligibility and register your demand on the scheme's portal, through its Apply for PMAY-U 2.0 page. You also give a self certificate or affidavit of your income as proof.
2. 2Your application goes to the lending institution you borrow from, which checks it against the eligibility rules.
3. 3The subsidy is credited to your loan account by the lender, reducing the principal, in five yearly instalments while the loan is active and more than half the principal is outstanding.

Line up the NOC before you sign

Shree Giriraj Real Estate has worked in Mumbai property since 1996, from its Borivali West office since 2005, as a MahaRERA registered agent (A51800005726). Our MHADA paperwork service prepares the Form 4 file, clears the dues paperwork and follows the NOC until it is in your hands, for MHADA flats anywhere in Mumbai. For a resale purchase, we plan the transfer and the loan as one timeline, so the money is ready when the seller expects it. Tell us the flat and your bank on WhatsApp, and we will tell you what the file needs, free, usually the same day.