The government is looking to create a fund that will provide guarantees for those who won’t otherwise be eligible for a housing loan, reported The Economic Times.
“This fund would essentially support borrowers who are not rated well and not eligible for a loan from a bank,” a senior finance ministry official was quoted as saying in the report.
The fund, the report said, will come as part of a package that is being prepared by the government to help the housing sector, which is hit hard by heavy debt, stalled projects and unsold units.
The prospective borrower will be able to avail of the guarantee from the proposed fund for a small fee, enabling those without steady income flows and credit history to become eligible for loans, the report said. Traditionally these groups either refrained from taking loans or have relied on informal lending sources for credit who often charge heavy interest rates upon them.
The new policy, once implemented, will change this situation and bring more people into the housing market, which is currently faced with a slump, said the report.
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