Pledging PF to buy low-cost homes to be reality next fiscal

[] Over four crore subscribers of the retirement fund body EPFO, may soon be able to pledge their provident fund to buy houses and use their accounts to pay the EMIs, according to a proposed scheme

The Employees’ Provident Fund Organisation (EPFO), has revealed that it is working on a housing scheme, which will enable its subscribers to pledge their PF accumulations to buy homes and pay home loan EMIs through their EPF account. “We can launch the scheme in 2017-18, after introduction of our online service like settling PF withdrawal claims, by March-end,” the EPFO’s central provident fund commissioner, VP Joy said.

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Under the scheme, the EPFO will act as a facilitator for its subscribers, so that they can buy affordable homes for themselves during their service period. The body has no plans to buy land or build houses for their subscribers. Under the proposed scheme, there will be a tripartite agreement between the member, the bank/housing agency and EPFO, for pledging future PF contributions as EMI payment.

[] How to use your provident fund to finance a home purchase

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Last year, the proposal for facilitating the EPFO subscribers to buy low cost homes, was listed on the agenda of the CBT meeting held on September 16. A report of an expert committee on housing facility for the subscribers, was also presented to the trustees during the meeting. The committee unanimously recommended a scheme, to facilitate subscribers to buy houses, where they will get an advance from their PF accumulation and will be allowed to pledge their future PF contribution as EMI payment.

The panel had suggested that subscribers will purchase a dwelling unit, with loans from a bank or housing finance company and hypothecation of property in favour of the latter. It was suggested that the benefits under the scheme of the Ministry of Housing and Urban Poverty Alleviation, could also be extended to the beneficiaries of the scheme.

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Category: Lifestyle

Debora Berti

Università degli Studi di Firenze, IT

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