HBA interest for Central Government Employees reduced to 7.1% for FY 2022-23

The government has revised the House Building Advance (HBA) rules for the Central Government Employees to 7.1% for the financial year that starts from 1st April 2022 to 31st March 2023. This central government employees' news will be something to hear about. The HBA interest rate was set at 7.9% for the previous 18 months, from October 1, 2020, to March 31, 2022. The government had previously revised the House Building Advance (HBA) rules for Central Government Employees, taking into account the 7th Pay Commission's accepted recommendations. The FM announced a reduction in the interest rate for House Building Advance (HBA) in September 2020, which was welcomed by the Central Government employees.

How is HBA interest calculated?

The attraction of the HBA is that the interest is calculated on a simple interest basis. The HBA recovery methodology is that the principal will be recovered in the first fifteen years in 180 monthly instalments, followed by interest in the next five years in 60 monthly instalments. The advance bears simple interest from the date of instalment payment.

Who is eligible for HBA advance?

Permanent employees and all temporary employees with 5 years of continuous service are eligible for HBA. Employees are eligible for House Building Advance on the date they obtain loans from banks and other financial institutions, regardless of whether they applied for House Building Advance before raising the loan.

For what purpose can the HBA be availed?

House Building Advance can be availed towards repayment of bank loan taken for the purpose of construction, purchase of new house or flat.

Copy of the order on FY 22-23 interest rate on HBA is given below.

F.No.1-17015/2(2)/2022/H.III
Government of India
Ministry of Housing & Urban Affairs
Housing — III Section

Nirman Bhawan, New Delhi.
Dated 01st April 2022

OFFICE MEMORANDUM

Subject: The interest rate on House Building Advance (HBA) to Central Government Employees — reg.

The undersigned is directed to state that in partial modification of this Ministry’s OM No. I.17011/11(4)/2016-H.II dated 09.11.2017 regarding House Building Advance Rules (HBA) — 2017, the rate of interest on House Building Advance to Central Government Employees will be @7.1% for FY 2022-23 starting from 1st April 2022 to 31st March 2023.

2. This issues with the approval of Competent Authority.

(Amita Gupta)
Under Secretary to Govt. of India
Tel: 23xxxxxx