Funds in EPFO can be used to buy units in non-governmental as well as governmental housing projects.
The Employee Provident Fund Organisation (EPFO) has introduced a group housing scheme which allows subscribers to withdraw 90 percent of the total money put in the retirement body fund for realty investments.
The funds in EPFO can be used to construct units in non-governmental housing projects too. The current scheme only allows investment into government or notified housing projects.
Under the new scheme – on lines of the government’s ‘Housing for All’ initiative - customers can also avail loans at subsidised rates under the Pradhan Mantri Awas Yojana (PMAY).
The body will initially target 5-10 projects in urban areas and 2-3 in semi-urban areas.
As per the new scheme, a minimum of 10 subscribers can form a society or a group and together buy housing units from public or private builders.
However, members need to have at least three years of service experience to join the scheme.
The retirement body will then sanction 90 percent of the provident fund principal and interest or the acquisition cost of the property, whichever is lower. The members also have option of paying equal monthly installment (EMI) of the loan – wholly or partly.
In case, a member ceases to exist or where amount to pay EMIs is not sufficient, EPFO will not be held responsible.“If the withdrawal or finance granted exceeds the amount actually spent for the purpose for which it was sanctioned, the excess amount shall be refunded by the member to the fund in one lump sum within thirty days of the finalisation of the purchase or the completion of the construction of, or necessary additions or alterations to a dwelling house or flat,” the EPFO said in a notification.LIVE NOW... Video series on How to Double Your Monthly Income... where Rahul Shah, Ex-Swiss Investment Banker and one of India's leading experts on wealth building, reveals his secret strategies for the first time ever. Register here to watch it for FREE.