G.O.(Ms.) No.171, House Building Advance Purchase of Housing Plot Ceiling, 2014

What the government order changes

The Housing and Urban Development (HBA) Department issued G.O.(Ms.) No.171 on 26 November 2014 to increase the House Building Advance available for purchasing a plot on which a house will be constructed. The maximum plot purchase component was raised from 20 percent to 50 percent of the eligible advance.

The first part of the advance is limited to the lowest of:

• 50 percent of the eligible House Building Advance.
• The plot value based on guideline value.
• The registered value of the plot.
• The amount requested by the applicant.

The sanction remains subject to the applicable conditions and procedures under the State Rules to Regulate the Grant of Advances to Government Servants for Building Etc., of Houses.

Who is affected

G.O.(Ms.) No.171 applies to Government servants and All India Service Officers seeking House Building Advance partly to buy a vacant housing plot and partly to construct a house on it.

It also covers:

• Applicants sanctioned an advance under the earlier ceiling who had not drawn any instalment. Their sanction may be amended, subject to eligibility.
• Pending applications for plot purchase and construction that had not been sanctioned for want of funds, subject to eligibility and the revised procedure.

Instalments for purchase and construction

G.O.(Ms.) No.171 provides for three instalments:

• First instalment: The permitted amount for purchasing the plot, subject to the 50 percent ceiling and the lowest value test described above.
• Second instalment: 50 percent of the remaining eligible House Building Advance, for bringing construction up to roof level.
• Third instalment: The remaining eligible amount, for completing construction.

The stated utilisation periods are two months for the first instalment, four months for the second instalment and four months for the third instalment.

Purchase, mortgage and completion conditions

The amended State Rules require the borrower to purchase the land and produce the sale deed for inspection by the Government or Collector within two months after drawing the plot advance, unless further time is allowed. Failure may require repayment of the full amount with interest.

The borrower must agree to mortgage the house site and the house constructed on it to the Government within six months after drawing the first instalment. The final instalment is payable after construction reaches roof level, provided the Head of Department or Collector is satisfied that area amenities such as water supply, street lighting, roads, drainage and sewerage are complete.