The House Building Advance (HBA) scheme for Central Government employees is regulated by guidelines issued by the Ministry of Housing & Urban Affairs (MoHUA). HBA provides financial assistance at concessional interest rates for acquiring, constructing, or expanding residential property.
Key Highlights & Current Policy Parameters
| Parameter | Current Rule Position |
| Maximum Advance (New Construction/Purchase) | Up to 34 times Basic Pay, capped at ₹25,00,000 |
| Maximum Advance (Expansion/Enlargement) | Up to 34 times Basic Pay, capped at ₹10,00,000 |
| Current Interest Rate | 7.1% per annum (Simple Interest) |
| Maximum Cost Ceiling | 139 times Basic Pay or ₹1.00 Crore (whichever is lower) |
| Repayment Period | Maximum 20 years (180 principal + 60 interest installments) |
1. Eligibility Criteria
HBA is admissible to Central Government servants fulfilling any of the following conditions:
- Permanent Employees: All permanent Central Government officials.
- Temporary / Officiating Employees: Employees with at least 5 years of continuous service, provided they do not hold a permanent appointment with a State Government and the sanctioning authority certifies their likely retention until the property is mortgaged.
- All India Services (AIS): AIS officers on deputation to the Central Government, public sector undertakings, autonomous bodies, or international organizations.
- Special Categories: Employees governed by The Payment of Wages Act, 1936, employees under Union Territories/NEFA, and long-term contract Artistes/Staff of All India Radio.
- Deputation / Foreign Service: Processed through the Head of Office (HoO) of the parent department.
- Ex-Servicemen: Military service is counted toward the 5-year eligibility period provided HBA was not drawn during previous service.
Important Provisions:
- Both Spouses Employed: If both husband and wife are Central Government employees, both are individually/jointly eligible to draw HBA.
- Officials Under Suspension: Eligible subject to providing collateral security in the form of a mortgage bond signed by two permanent Central Government employees.
2. Permissible Purposes
HBA can be drawn for only one of the following purposes during the official’s entire service career:
- Constructing a new house on a plot owned individually or jointly with spouse.
- Purchasing a plot and constructing a house thereon.
- Purchasing a plot or acquiring a flat under Cooperative Schemes / Cooperative Group Housing Societies (CGHS).
- Outright purchase of a new, unlived ready-built house/flat from Housing Boards, Development Authorities, or registered private builders (purchases from private individuals are not permitted).
- Self-Financing Schemes (SFS) under Delhi (DDA), UP, Lucknow, Bangalore, etc.
- Expansion of living accommodation of an existing house owned individually or jointly with spouse.
- Home Loan Migration: Repayment/takeover of existing home loans taken from Banks/Financial Institutions.
- Construction of the residential portion on a shop-cum-residential plot in a residential colony.
3. Cost Ceiling Conditions
- Maximum Cost Limit: The total cost of the house/flat (excluding land cost) cannot exceed 139 times the basic pay, subject to a maximum cap of ₹1.00 Crore.
- Expansion Limit: For accommodation enlargement, the combined cost of the existing structure (excluding land) plus proposed additions must stay within the cost ceiling.
- Existing Property Restriction: Neither the employee nor their spouse/minor children should own a residential property in the same town/urban agglomeration.
- HUF Exception: If the official belongs to a Hindu Undivided Family (HUF) owning a house in the same town, HBA is restricted to 60% of normal entitlement.
- Combined Funding: If final withdrawal from the GPF is taken alongside HBA, the cumulative amount must not exceed the prescribed cost ceiling.
4. Repayment Capacity Rules
The maximum permissible HBA loan is calculated based on the employee’s remaining length of service and repayment capacity:
| Service Remaining at Retirement | Maximum Monthly Deduction / Capacity | Gratuity Adjustment |
| More than 20 Years | Up to 40% of Basic Pay | N/A |
| Between 10 and 20 Years | Up to 40% of Basic Pay | Up to 65% of DCR Gratuity adjustable |
| Less than 10 Years | Up to 50% of Basic Pay | Up to 75% of DCR Gratuity adjustable |
5. Disbursement Schedule
Disbursement depends on the nature of the property acquisition:
+----------------------------------------------------------------------+
| HBA DISBURSEMENT TYPES |
+-----------------------------------+----------------------------------+
|
+-----------------------------+-----------------------------+
| |
[ READY-BUILT FLAT / HOUSING ] [ NEW CONSTRUCTION ]
• Paid in 1 Lump Sum upon • 1st Installment (50%):
Agreement Execution After Mortgage Execution
• Mortgage must be completed • 2nd Installment (50%):
within 3 Months When construction reaches
Plinth Level
Plot Purchase + Construction Breakdown
- Single-Storeyed Construction:
- 40% (or actual plot cost): Disbursed on execution of Agreement & Surety Bond.
- 30%: Disbursed upon mortgage deed execution.
- 30%: Disbursed when construction reaches plinth level.
- Double-Storeyed Construction:
- 30%: Disbursed on execution of Agreement for plot cost.
- 35%: Disbursed upon mortgage deed execution.
- 35%: Disbursed when construction reaches plinth level.
6. Recovery & Interest Computation
- Recovery Order: Principal is recovered first in a maximum of 180 monthly installments, followed by interest in a maximum of 60 monthly installments (Total = 240 installments).
- Commencement of Recovery:
- Ready-Built Flat: Starts from the salary month following the drawal of advance.
- Construction Case: Starts from the salary month following house completion OR the 18th month after the 1st installment drawal (whichever is earlier).
- Plot Purchase + Construction: Starts from the salary month following completion OR the 24th month after the plot advance drawal (whichever is earlier).
- Interest Calculation: Simple interest calculated monthly on the outstanding balance.
- Death in Service: If an official dies while in service, no interest is charged beyond the date of death on the portion of the advance adjusted against DCR Gratuity.
7. Reconveyance Procedures
Upon full repayment of principal and interest:
In Case of Intestate Death: Reconveyance is executed in favor of legal heirs upon submission of a No Objection Certificate (NOC) affidavit from other legal heirs[cite: 1]
Release of Property: The mortgaged property is formally reconveyed to the official using Form No. 7[cite: 1].
Registration Mandatory: Registration of the reconveyance deed is compulsory, and expenses are borne by the employee[cite: 1].
Document Return: Original sale deeds, mortgage documents, and title certificates are handed back against a formal receipt[cite: 1].