HUDCO restarts lending for home purchases

State-run Housing and Urban Development Corporation (HUDCO) yesterday said it had restarted lending for home purchases with the launch of a competitively priced product.

The corporation, which has a mandate of facilitating affordable housing and urban development, would be offering home loans at a floating rate of 10.20 per cent for loans up to Rs25 lakh, its regional office in Mumbai said in a statement.

The interest rate on the product beats the 10.25 per cent of the largest lender in the country, State Bank of India, also the segment market leader. The lender known for its aggressive pricing offers home loans of up to Rs30 lakh.

"This makes it the most competitive home loan product available for salaried individuals in the major capital cities of India," the statement said.

According to the statement, it would also offer features including free personal accident insurance, no charges before sanction and no pre-payment charges, which are offered by a host of players.

Home loan lending which was frozen since May 2011 and has been re-started on 15 August, The Economic Times quoted an unnamed official as saying though he gave no reasons for either the closing or restart.

The official added, HUDCO would moreover, not charge any processing fee till the sanction of the loan, unlike some commercial lenders who charged upfront.