Apun Ghar Interest Subvention Scheme for Housing Loan

What is the Apun Ghar scheme in Assam?

Apun Ghar is an interest subvention scheme for housing loans taken by regular State Government employees in Assam. The Finance (Audit & Fund) Department, Government of Assam formulated the scheme through Office Memorandum No. FM.45/2016/157 dated 21 March 2017, giving effect to an announcement made in the Assam Budget Speech for 2016-17. Apun Ghar, Assamese for "own home": is delivered entirely through the State Bank of India, which the State Government chose as the lending bank for the scheme.

Apun Ghar does not hand cash to the employee. Instead, the Government of Assam pays down part of the interest cost on the employee's home loan. According to the Finance Department's scheme document, the State Bank of India proposed to extend housing loans to State Government employees at 8.50% for women and 8.55% for men, and the Government decided to provide an interest subvention of 3.5%. After that subvention, an eligible employee borrows up to Rs 15 lakh at 5.0% (women) and 5.05% (men).

Key features of Apun Ghar

• Interest subvention of 3.5%, funded by the Government of Assam.
• Effective borrowing rate of 5.0% for women employees and 5.05% for men.
• Housing loan of up to Rs 15 lakh covered by the subvention.
• No processing fee charged from State Government employees.
• No mortgage of property required for a loan up to Rs 10 lakh.
• Reduced rate applicable for up to 240 EMIs, that is 20 years.
• Repayment permitted up to age 70 for employees with pensionable service.

The subsidy is not paid to the bank in the abstract. The scheme document specifies that the subsidy amount is credited to the salary account of the employee, the same account from which the housing loan instalments are recovered, and is charged to a pre-funded subsidy account maintained by the Government of Assam. SBI gives the Government an audited certificate on the utilisation of the subsidy each financial year.

Who is eligible for Apun Ghar?

You can take an Apun Ghar loan if:

• You are a regular employee of the Government of Assam. The scheme is written for regular State Government employees and no other category.
• You are at least 21 years old.
• You have at least 5 years of residual service left.
• Your loan can be fully repaid by age 70 if you hold pensionable service, or by age 60 if you are a non-pensionable service holder.
• The property being financed is within the State of Assam.

Employees with pensionable service get a longer runway than most housing loans allow. The State Government decided to provide a repayment schedule stretching beyond the age of retirement up to 70 years of age, and SBI offered this for employees who maintain their pension account with SBI and who give an undertaking and a Standard Instruction (SI) to SBI for deduction of EMIs from the pension account. SBI takes responsibility for deducting the housing loan beyond retirement age up to 70. The memorandum also records that EMIs are adjusted to be higher during the service period and lower after retirement, so the instalment matches the employee's paying capacity in each phase.

Close relatives can come together to take a housing loan jointly if they are all employees of the Government of Assam, and the Government interest subvention is available on the clubbed loan up to the prescribed limit.

You cannot apply, or the subvention will not apply, if:

• You are not a regular Government of Assam employee. The scheme does not extend to the general public, to private sector workers or to employees of other state governments.
• You are under 21 years of age, or you have less than 5 years of residual service left.
• You want to buy an ancestral plot of land from a close relative such as a parent, spouse, sibling or child. That purchase is expressly not covered.
• The property is outside Assam.
• You apply more than 2 years after the date of issuance of the Government Office Memorandum. The scheme document states that the benefits of interest subvention are available to eligible employees who apply for the housing loan within 2 years from the date the memorandum or notification was issued. Since the memorandum is dated 21 March 2017, check the current window with your DDO or the Finance Department before assuming the subvention is still open, as the Government has issued fresh instructions on housing loan subsidy since then.

What can the Apun Ghar loan be used for?

Apun Ghar covers four clearly listed purposes:

1. Construction of a house on an existing plot of land, where the plot is in the name of the Government servant or his or her spouse.
2. Purchase of land and construction of a house on it.
3. Purchase of a flat.
4. Purchase of a readymade building within the State of Assam.

Purchase of an ancestral plot from a close relative is excluded from all of these. Insurance is also folded into the arrangement: the scheme states that the insurance premium will be financed by the bank by way of an additional term loan called a Suraksha loan, and that the house or flat financed by the bank is to be comprehensively insured by the employee against risks such as fire, riots, earthquake, lightning and floods.

How to apply for an Apun Ghar housing loan

Apun Ghar is an offline, DDO-routed application. The employee does not apply directly at a bank counter on their own.

1. Download the application form. Open the Finance Department scheme page at finance.assam.gov.in/schemes/detail/apun-ghar and download the "Application Form for Home Loan" PDF along with the scheme office memorandum.
2. Fill the SBI customised format. The application format is provided by the State Bank of India and includes a due and drawal statement of salary built into the form itself.
3. Get the salary statement certified by your DDO. The due and drawal statement must be duly filled in and certified by the Drawing and Disbursing Officer concerned. This is the step that establishes your salary position and cannot be skipped.
4. Submit the form through your DDO, together with the complete set of documents listed in the scheme checklist. Applications are submitted by employees through their DDOs, not individually.
5. Wait for SBI due diligence and scrutiny. The required due diligence and scrutiny is done by SBI, and the SBI team accords the final sanction based on the proposal.
6. Choose your branch for disbursement. After sanction, the file is sent for documentation and disbursement of the loan to a branch as per the choice of the applicant.
7. Set up recovery. A check-off facility is given by the DDO of the concerned employee for recovery of interest and principal from salary. If you are opting for repayment beyond retirement, give SBI the undertaking and Standard Instruction for EMI deduction from your SBI pension account.

How is the interest rate calculated over the loan term?

EMIs are fixed on the basis of the SBI offered rate of 8.50% for women and 8.55% for others, and the Government's subvention is then credited back to the salary account. The scheme document is candid that this rate is not frozen forever: the SBI offered rate of 8.50%-8.55% may change as and when the MCLR (Marginal Cost of Funds based Lending Rate) is revised, and it records that SBI's MCLR at the time was 8.0%. After 2 years from the date of sanction, a floating rate of interest linked to the SBI MCLR becomes applicable.

The Government also asked for a formula to be worked out taking the floating rate as the basis, specifically so that if interest rates fall in future the employees get the due benefit rather than being locked into an older, higher rate. The reduced rate of interest with State Government subvention applies up to 240 EMIs, that is up to 20 years of EMI deduction.

What happens when the loan is repaid?

On completion of repayment of all dues for loans above Rs 10 lakh, the SBI branch releases the Title Deeds against acknowledgement where a mortgage was created, and issues a No-Due certificate to the borrower, with a copy to the DDO and to the Finance Department. Keep that certificate — it is the document that closes the file at both the bank and the department end.

Common reasons an Apun Ghar application stalls

• The DDO certification is missing or incomplete. The due and drawal statement of salary must be certified by the DDO in the form itself.
• Residual service is under 5 years, or the repayment schedule runs past age 70 (pensionable) or age 60 (non-pensionable).
• The property purchase is from a close relative. An ancestral plot bought from a parent, spouse, sibling or child falls outside the scheme.
• The property is outside Assam.
• No pension account with SBI where the employee wants repayment to continue past retirement. That route requires the pension account to be with SBI plus a Standard Instruction for EMI deduction.
• Applying outside the two-year subvention window set by the memorandum.

Where to raise an Apun Ghar grievance

Apun Ghar has a grievance route built into its design. A Grievance Redressal Cell is opened at each Regional Business Office and at some identified SBI branches and the Local Head Office (LHO), headed by a Deputy General Manager, specially for the scheme, to take care of grievances of employees of the Government of Assam. The scheme also commits SBI to ensuring hassle-free service, with a single dedicated window at bank level for concerned departments for all dealings related to the scheme.

For scheme-level questions; whether the subvention window is open, or how the subsidy credit to your salary account is being handled, the nodal authority is the Finance (Audit & Fund) Department, Assam Secretariat, Dispur, and your own DDO is the first point of contact. Assam later introduced a separate home loan subsidy scheme, Aponar Apon Ghar, aimed at permanent residents of Assam rather than only government employees; if you are not a State Government employee, that is the scheme to look at instead of this one.