A Housing Finance Company is a company registered under the companies’ act 1956 to provide a loan or to finance housing whether directly or indirectly. The main object of Housing Finance Companies is to help those people who are willing to purchase a home but have a shortage of funds.
Many people often times hunt on the internet for the objective or meaning of Housing Finance Companies. So, today in this article we have drafted five important FAQ on Housing Finance Companies. Read it carefully!
- What is the Housing Finance Companies?
It is yet another form of Non Banking Financial Company who is engaged in the business of financing of acquisition or construction of houses that also includes the development of plots of lands for the construction of new houses.
- Is it mandatory to have registration from National Housing Bank?
Yes, an HFC requires registration from National Housing Bank under the act for commencing or carrying on the business of the housing finance.
- Is registration is Mandatory for all Housing Finance Companies?
Under section 29A of the National Housing Bank Act, 1987, no housing finance company shall commence or carry on any activity as a housing finance company without-
- Obtaining a certificate of registration from National Housing Bank
- Having a net owned fund of 25 lakh rupees or such higher amount as may be notified.
National Housing Finance exercises its power from time to time as specified and as per the latest notification w.e.f. April 1, 2014, the said requirement of Rs 10 crores.
- What are the requirements for commencing Housing Finance Business by HFC under the NHB act?
For commencing the housing finance business the Housing Finance Companies is required to have the following in addition to the requirement under the companies act, 1956:
- Certificate of Registration from NHB
- Minimum net owned fund of Rs 10 crores
- Either it should primarily transact or has as one of its principal objects of transacting the business of providing finance for housing, whether directly or indirectly
- HFC should be eligible or should be in a position to pay its present or future depositor in full as
- Any activity should not be conducted in a manner detrimental to the interest of the depositor in future or present
- The general character of the management or the proposed management of the HFC shall not be prejudicial to the public interest or to the interest of its depositors
- HFC has an adequate capital structure and earning a prospect
- Public interest shall be served by the grant of a certificate of registration to the Housing Finance Company to commence or carry on the business in India.
- What are the categories registered under National Housing Finance?
Housing Finance Companies are categories in terms of the liability into Deposit and Non-Deposit accepting Housing Finance Company. The list of the registered Housing Finance Companies is available on NHB websites.
