Subvention Scheme: Helping First Time Buyers to Purchase Their Dream home

Subvention Scheme in Real Estate

Text Version:

The revised subvention scheme (2013) has been taken positively by buyers and builders alike

Salient Features & Benefits of Subvention Scheme

• Payments made as per a tripartite agreement signed by the buyer, builder, & bank
• No EMI to be paid by the buyer till possession or for a specific duration (as per the agreement)
• Relatively smaller upfront amount is paid by the buyer (10-30 % of the total value)
• Payments are linked with the stages of completion
• Involvement of a reputed bank increases probability of timely completion
• Increase in liquidity for builders (banks currently wary of directly funding builders)
• Excellent option for people with low savings but good monthly income

What is a Tripartite Agreement?

• Delineates terms & conditions for making payments to the builder
• Must be signed by the buyer, builder, & bank
• Mentions duration for which Pre-EMI is paid by the builder
• Includes amounts & method for disbursement (construction linked)
• Interest rate associated with the payments made is also mentioned among other things

Things to Consider Before Going for Subvention Scheme

• Duration of Pre-EMI (till possession or for a specific duration)
• Track record of the builder
• When payments are made (stages of completion)
• Banker’s credibility
• Upfront payment amount needed

Follow us on: Facebook, Twitter & Linkedin

Leave a Reply

Your email address will not be published. Required fields are marked *