House Building Advance

In this article House Building Advance include 10 most important points taken from Swmay’s Handbook.House Building Advance cost ceiling condition

House Building Advance condition:-

1. House Building Advance eligibility:-

  1. All permanent Government employees.
  2. All other employees with at least 5 years of continuous service, provided they do not hold permanent appointment under a State Government and the sanctioning authority is satisfied about their likely retention in service till the house is built and mortgaged.
  3. Members of All India Service deputed for service under the Central Government/Company/Association/Body of individuals. whether incorporated or not, which is wholly or an International Organization and Autonomous Body not controlled by Government or Private Body.
  4. Employees of Union Territories and North-East Frontier Agency.
  5. Staff/Artistes of the All India Radio who fulfill the condition prescribed at (2) above and have been appointed in long-term contracts extending to the age as per extant rule.
  6. Central Government employees governed by the Payment of Wages Act, 1936.
  7. Central Government employees on deputation to another Department or on Foreign Service. Such cases to be processed by the Head of the Office of the Parent Department.
  8. Extant rules for eligibility conditions of Ex-servicemen nd of Central Government employees under suspension remains unchanged.
  9. In case where both the spouses are Central Government employees and are both eligible for grant of House Building Advance, the advance will be admissible to both of them jointly/separately.

2. House Building Advance Purposes –

HBA is admissible for only one of the following purposes. –
  1. Construction a new house on the plot owned by the employee or the employee and the employee’s wife/ husband jointly with the clear title of the plot.
  2. Purchasing a plot and constructing a house thereon.
  3. Purchasing a plot under co-operative Scheme and constructing a house/flat thereon or acquiring a house through membership of Co-operative Group Housing Societies.
  4. Purchase/ construction of house under the self-finacing scheme of Delhi, Bangalore, U.P., Luchnow, etc.
  5. Outright purchase a new ready-build house/flat from Housing Boards, Development Authorities and other statutory or  semi-Government bodies and from registered builders i.e., registered private builders, architects, house building societies, etc., but not from private individuals.
  6. Expansion of living accommodation of an existing house owned by the employee or jointly with spouse. The total cost of the existing structure (excluding cost of land) and the proposed additions should not exceed the prescribed cost ceiling under these rules.
  7. Repayment of loan or advance taken from a Government or HUDCO or private sources even if the construction has commenced, subject to certain conditions.
  8. Before grant of HBA, the Head of the Department –
  • should satisfy himself that the home loans were taken by the Government employee entirely for the purpose of construction/purchase of new house/flat.
  • should ensure that the HBA sanctioned is limited to the amount of loan still due to be repaid by the Government employee.
  • HBA can be granted on the date the Government servant obtained loans from Banks and other financial institutions, irrespective of whether they applied for HBA before  raising the loan.
  • HBA for repayment of bank loan can be granted in one lumpsum and the Government employee shall produce the Utilization Certificate within one month from release of HBA.
  • Employee to satisfy other provisions of HBA Rule.
9. Constructing only residential portion of the building on a plot earmarked for a shop-cum-residential plot, in residential colony, subject to prescribed cost ceiling.

Questions that are asked from google about House Building Advance eligibility:- 

Q1. How many times HBA can be taken?

Ans. Only once in his/her lifetime.

Q2. What is the maximum limit of HBA that can be sanctioned?

Ans. 34 months’ basic pay.

3. House Building Advance Conditions. –

  1. The official should not have availed of any loan or advance for the purpose from any other Government source, Housing Board, other semi-Government or Local bodies, Development Authorities, etc. Where such loan has been availed of, HBA can be granted if the Government servant undertakes to repay the outstanding loan forthwith in one lumpsum.
  2. The official or spouse or minor child should not already own a house in the town/ urban agglomeration where the house is proposed to be constructed or acquired.
  3. If the official is a member of HUF, which owns a house at the same place, he may be granted advance restricted to 60% of the normal entitlement.
  4. The title to the land should be clear.
  5. Advance for ready-built house or flat is admissible for outright purchase only.

4. House Building Advance Cost ceiling. –

  1. Cost of the house to be built/ purchased (excluding the cost of plot)should not exceed 139 times of the basic pay of the employee subject to a maximum of rupee 1 crore (one crore) only.
  2. The cost ceiling may be relaxed up to 25% in individual cases based on merit by the Administrative Ministry concerned.
  3. Minimum cost-ceiling (लागत सीमा) need not be insisted.
  4. If both husband and wife are employed in Central/State Government, Public Undertakings, semi-Government Institutions or Local Bodies, the pay of both of them will be taken into consideration for calculating the cost ceiling.
  5. In the case of enlargement to existing accommodation, the total cost of the existing structure and the cost of enlargement should not exceed the limit in 4. Cost Ceiling above.
  6. If GPF withdrawal is also taken for house building, the total amount of GPF withdrawal and the House Building Advance should not exceed the cost-ceiling limit (4. Cost Ceiling above).
  7. If the advance is for constructing residential part of the building on a shop-cum-residential plot situated in a residential colony –
  • the cost of land and the cost of superstructures of the proposed residential portion and shop(s) should not exceed the ceiling limit.
  • the entire property including the shop(s) and the residential portion should be mortgaged (गिरवी).
  • the entire building including the shop(s) should be insured against fire, lightning, floods, etc.
8. House/Flat constructed/acquired with the help of HBA to be used for residential purpose only.
9. No enhancement of HBA in case of subsequent revision of DCRG limits.

5. House Building Advance Amount of Advance. –

  1. Only one advance shall be sanctioned to the Government servant during his/her entire service.
  2. The maximum amount of advance shall be:
  • 34 months’ basic pay subject to a maximum of rupees 25 lakhs only or cost of the house/flat, or the amount according to repaying capacity, whichever is the least for construction/ purpose of new house/ flat.
  • for expansion of existing house, the amount of HBA will be limited to 34 months’ basic pay subject to maximum of rupees 10 lakhs only, or  the cost of the expansion, or the amount according to repaying capacity, whichever is the least.
  • the amount of the advance shall be restricted to 80% of true cost of the land and construction of house or cost of expansion of living accommodation in the case of construction in rural areas. This can be relaxed and 100% can be sanctioned if the head of the Department certifies that the concerned rural area falls within the periphery of town or city.
3. Family Pension at normal rates drawn by a Government servant will be clubbed with basic pay for computing amount of advance as well as cost ceiling.
4. The amount of advance sanctioned can be reduced at the request of the Government servants to avail of the reduced rate of interest, if the entire advance has not been drawn.

Questions that are asked from google about HBA cost ceiling condition:-

Q1. Is entire building including the shop(s) should be insured against fire, lightning, floods, etc.

Ans. Yes

Q2. What is the maximum limit of HBA that can be sanctioned ?

Ans. 34 months’ basic pay subject to a maximum of rupees 25 lakhs only or cost of the house/flat.

House Building Advance repayment instalment:-

  • Enhancement of ceiling,
  • Repaying capacity,
  • Disbursement of advance.
  • Time-limits for utilization of advance
  • Surety in certain cases.
House Building Advance repayment instalment

6. Enhancement of ceiling of HBA sanctioned on or after 1-1-2016 but before 9-11-2017. –

An enhancement of House Building Advance, if applied for, would be granted for an amount equivalent to the difference between the previously sanctioned amount and the new eligible amount determined on the basis of basic pay as per Seventh CPC, subject to complying following conditions.

(i) The employee should not have drawn the entire amount of HBA sanctioned under earlier orders and/ or where construction is not completed/full cost towards acquisition of house/flat is yet to be paid.

(ii) There will be no deviation from the approved plan of construction on the basis of which the original sanction of House Building Advance was accorded. The revised cost of the original plan can, however, be considered for determining the additional amount, subject to the prescribed maximum limits.

(iii) Supplementary Mortgage Deed, Personal Bond and Sureties will be drawn and executed at the expense of the loanee.

(iv) The actual entitlement will be restricted to the repaying capacity computed on the basis of the formula at 4. Cost ceiling above it should be ensured that the entire amount of advance with interest is recovered before retirement of the Government servant.

(v) The new rate of interest of 8.5% would be chargeable only on collective amount that would remain outstanding on grant of enhancement so granted. Thus, the amount of HBA that has already been repaid on old rates will not attract the fresh interest charges.

(vi) However, the existing limit of maximum admissible amount of 25 lakhs for expansion of existing house/ flat would remain unchanged. In other words, the sum total of previously sanctioned House Building Advance and the enhancement granted under these orders cannot exceed the aforesaid limits. In any case, not more than one enhancement is admissible to a Government employee.

(vii) The applications for enhanced House Building Advance should be submitted within six months form 29-06-2018.

7. House Building Advance repayment instalment –

The repaying capacity of the official will be computed on the following basis :-

Length of remaining service

Repaying Capacity


In case of employee retiring after 20 years.

40% of Basic Pay.


In case of employee retiring after 10 years but not later than 20 years.

Up to 40% of basic pay. 65% of DCR Gratuity may also be adjusted.


In cases of employee retiring within 10 years.

Up to 50% of basic pay. DCR Gratuity up to 75% can be adjusted.

8. House Building Advance Disbursement of advance. –

(a)  For purchase of ready built house. – In one lumpsum as soon as the applicant executes an agreement in the prescribed form. The employee should ensure that the house is purchased and mortgaged to the Government within 3 months of drawal of the advances.
(b) For purchase/ construction of new flat. – Either in one lumpsum or in convenient instalments at the discretion of the Head of Department. The employee should execute the agreement in prescribed form before the advance/ first instalment of advance is paid to him/her. The amount drawn by the employee should be utilized for the purchase/ construction of the flat within one month.
(c) For construction/ expansion of living accommodation, etc. – Payable in two instalments of 50% each.The first instalment will be paid after the plot and proposed house/ existing house is mortgaged and the balance on the construction-reaching plinth level.
(d)  For expansion to be carried out on the upper storey of the house. – Disbursed in two instalments, first instalment on executing the mortgage deed and the second instalment on the construction reaching roof-level.

(e)  For purchase of plot and construction of house. –

(i) Single Storeyed House : After agreement in prescribed form is executed on production of surety bond, 40% of the advance or actual cost will be disbursed for purchase of plot. The balance amount will be disbursed in two equal instalments, first after the mortgage is executed and second on the consturction reaching plinth level.

(ii) Double Storeyed House : 30% of advance for cost of plot will be disbursed on executing the agreement. The balance amount will be disbursed in two equal instalments, the first on executing the mortgage deed and the second on construction reaching plinth level.

9. House Building Advance Time-limits for utilization of advance :

(a) Purchase of land. – Should be completed and the Sale Deed produced within 2 months, failing which the advances should be refunded in lump.
(b) Purchase of house. – Acquisition and mortgage to Government should be completed within 3 months. Extension of time-limit may be granted by Heads of Departments.
(c) Purchase/ Construction of new flat. – Should be utilized within one months, unless extension of time-limit is granted.

10. House Building Advance Surety in certain cases. –

(i) In addition to execution of mortgage/agreement, the surety of an approved permannt official is necessary before releasing the sanctioned advance or any part thereof to –
(a) Officials who are not permanent.
(b) Officials due to retire from service within 18 months following the date of application for advance.
(c) Permanent officials [not covered by (b) above] requiring the advance for the purchase of a ready-built house.
(ii) Collateral Security. – For constructing or purchasing ready-built flats, officials should furnish adequate collateral security as laid down under Rule 274 of the General Financial Rule to the satisfaction of the Head of the Department, in case where the land on which the flats stand is not mortgaged by the owner of the land in favour of the President of India as security towards repayment of the advance.
Please share this with your colleague. Thanks.

Post a Comment