Non-Resident Indians (NRIs) are recognized under the Foreign Exchange Management Act (FEMA).
According to the RBI guidelines followed by banks and housing finance companies, an Indian citizen holding a valid Indian passport, who is employed abroad, conducting business or vocation outside India, or residing abroad for an indefinite duration, is considered an NRI.
This loan is available for NRIs wishing to purchase a new or existing residential property in India. The loan amount is based on the borrower’s income, the property’s value, and the eligibility criteria set by the lender.
NRIs can renovate their homes in India by availing loans or using funds from NRE/NRO accounts for seamless transactions.
NRIs can apply for home construction loans in India through their NRE/NRO accounts, offering flexible repayment options and competitive interest rates.
Loan Against Property (LAP) allows individuals to secure funds by mortgaging their property. NRIs can also avail LAP for personal or business needs with flexible terms and attractive interest rates..
These loans typically come with flexible repayment terms, competitive interest rates, and repayment options in both Indian and foreign currencies. However, eligibility criteria for NRIs differ slightly from residents, and they may need to provide additional documentation like proof of overseas employment or income.
Age: The loan applicant must be at least 21 years old.
Qualifications: A graduate degree is a pre-requisite for NRI loan seekers.
Income: The applicant’s monthly income should not be less than $2,000 (varies by housing finance company). Stability of employment or business is also a key factor for eligibility.
Payment Options: EMI payments must be made through the NRI’s NRE/NRO account, not through savings accounts in India.
Number of Dependents: The applicant’s number of dependents, assets, and liabilities play a role in determining eligibility.
NRIs can avail home loans ranging from Rs. 5 lakh to Rs. 1 crore, depending on their repayment capacity and the property cost, which is assessed by the loan provider.
Loan Limit: NRIs are eligible for a maximum of 85% of the property cost or construction cost, and 75% of land cost if purchasing land.
Co-Applicant: NRIs can apply for a loan with a co-applicant who has a separate income source.
Interest Rate: NRIs typically pay an extra 0.25% – 0.50% interest compared to resident Indians.
Location: Certain locations may have negative criteria based on housing finance company guidelines, which may make it more challenging for NRIs from those areas to avail loans.
The Reserve Bank of India (RBI) has stated that Non-Resident Indians (NRIs) purchasing immovable property in India must make payments through funds received in India via normal banking channels, such as inward remittances from abroad.
Both NRIs and Resident Indians are allowed to acquire immovable property in India, except for agricultural land, plantations, or farmhouses. The RBI has also issued specific guidelines for sanctioning home loans to Non-Resident Indians.
The home loan amount for NRIs should not exceed 85% of the cost of the home unit, with the remaining 15% to be covered as the applicant’s own contribution towards the cost of the unit.
This 15% contribution, along with the loan amount, can be funded through direct remittances from abroad via normal banking channels, or through Non-Resident (External) (NR(E)) and Non-Resident (Ordinary) (NR(O)) accounts in India.
The repayment for the loan, which includes both principal and interest along with any applicable charges, must be made from abroad through normal banking channels or through NR(E) and NR(O) accounts in India.
NRIs can repay their loans using funds from any non-resident account maintained in accordance with the Foreign Exchange Management Act, 1999, and the regulations issued by the RBI. Given the economic stability of NRIs, home loans are highly feasible for them, as they are considered a valuable financial resource.
Non-Resident Indians (NRIs) are required to submit additional documents compared to resident Indians when applying for home loans in India. These include a copy of the passport, work contract, and other relevant documents. NRIs also need to meet specific eligibility criteria to qualify for home loans.
A Power of Attorney (POA) is a crucial document for processing an NRI home loan, as it allows a local representative to act on behalf of the NRI in case of their absence from India. Typically, the POA is granted to a close family member such as parents, spouse, or children, though it is not mandatory.
Documents required for NRI home loans include:
1. Passport and Visa
2. Appointment letter and contract from the employer
3. Labour card/identity card (translated into English and countersigned by the consulate)
4. For Middle East employees: Salary certificate (in English) specifying name, date of joining, designation, and salary details
5. Bank statements for the last six months
6. Classified documents for both salaried and self-employed NRI applicants.
Many lenders allow NRIs to apply for a loan jointly with a co-applicant (who may be a resident Indian or another NRI). The co-applicant’s income and creditworthiness will be considered in the loan assessment.
1. Property Title Deed
A clear title deed establishing the seller’s ownership of the property.
Ensures the property is free from legal disputes or encumbrances.
2. Sale Agreement
The agreement between the buyer and the seller that outlines the terms and conditions of the property sale.
3. Encumbrance Certificate (EC)
Proves that the property is free from financial or legal liabilities.
Includes details of any mortgages, loans, or legal claims against the property.
4. Approved Building Plan
A copy of the building plan approved by the local municipal authorities.
Ensures that the construction adheres to local building laws and regulations.
5. Property Tax Receipts
Latest property tax payment receipts to confirm no dues are pending.
6. Occupancy Certificate (OC) (for ready-to-move-in properties)
Issued by the municipal authority, confirming that the building is fit for occupancy.
7. Completion Certificate (CC)
Applicable for newly constructed properties, indicating the builder followed all regulatory requirements.
8. Allotment Letter
Provided by the housing society or builder for under-construction properties.
9. Possession Certificate
Issued by the builder/seller to certify the date on which possession of the property was given
Non-resident Indians (NRIs) holding an Indian passport do not require any permission from the Reserve Bank of India (RBI) for acquiring immovable property in India for bona fide residential purposes. This provision allows NRIs to invest in real estate in India without unnecessary bureaucratic hurdles, making it an attractive option for property investment in India.
NRIs holding an Indian passport can make property purchases by paying the purchase consideration either by remitting funds from abroad through normal banking channels or from their NRO, NRE, or FCNR accounts. This flexibility in payment methods ensures a smooth and efficient transaction process for NRIs investing in Indian real estate.
This loan is available for NRIs wishing to purchase a new or existing residential property in India. The loan amount is based on the borrower’s income, the property’s value, and the eligibility criteria set by the lender.