When NRIs wish to buy homes back home

A primer on how NRIs can apply for a home loan in India, and how to ensure a hassle-free application process.

Wherever a person may be in the world, there is just no place like home! This is particularly true of NRIs – they live abroad, earn handsome salaries and have a good life. But yet, the pull towards their motherland is strong, partly because they have family and friends in India. Besides, isn’t it true what they say about taking an Indian out of India, but India never leaving an Indian?

The most tenable connections that NRIs build with their homeland come via investments made in India. Chief among these are land and house purchase deals. Several NRIs invest in property in India every year, through a family member or a designated power of attorney. Recognising their interest in property purchase here, the RBI has also streamlined the home purchase process for NRI customers.

Today, banks and financial institutions offer customised home loan products aimed at NRIs’ home purchase. If you are looking for a suitable home loan, choosing the right lending institution is crucial. Look for –

• Easy application process – the lender must offer the opportunity to apply for the loan online.
• Quick and transparent processing – the lender must give a full schedule of processing charges upfront, and explain the processing timelines.
• Rapid turnaround time between application and approval – this is the amount of time that the housing finance company takes to check the property and applicant’s credentials.
• Fast loan amount disbursal – NRIs normally visit India for a short duration of time, so it is ideal if the loan disbursal is done as quickly as possible.

But first…

Checking the NRI home loan eligibility is the first step in the loan application process. You can fill out a simple form on the lending institution’s website and provide your contact details. This will initiate the loan application process.

Meanwhile, check the NRI home loan eligibility using the portal’s online calculator. The eligibility is computed subject to certain criteria, such as:

• Age
• Citizenship status
• Income
• Whether the applicant is working abroad for at least one year prior to applying for the home loan
• Whether the applicant is an Indian passport holder, showing NRI status on employment/assignment/deputation.

The NRI applicant can increase their home loan eligibility by adding a co-applicant or co-owner on the same property. However, this co-applicant or co-owner must have a regular income, and they can be a parent, sibling, spouse or adult child.

Once the application is approved, the loan is split into two parts: the NRI applicant’s personal contribution to the house purchase, i.e. up to 20% of the property value (as mentioned in the property agreement papers) plus the housing loan, which is up to 80% of the property value for loans amounting to Rs 75 lakh and below, or 75% of property value for loans exceeding Rs 75 lakh.