Rules for House Building Advance (HBA) for Indian Railway Employees

HBA is admissible to : 

• A Permanent railway employee or a temporary Railway employee with 10 years of service. 
• Officers of all India services (IAS, IPS, IFS) on deputation to the Railways continuously for 6 years. 
• If both Husband and wife are Railway employees, advance is admissible to any one of them. Where a house-site is owned jointly by husband and wife, amount will be sanctioned only if both agree to mortgage the same to Government. 
• If both Husband and wife are Government Servants, the pay of both of them will be taken into consideration for calculating the ceiling limit. 
• A Railway employee under suspension may be granted HBA on furnishing collateral security in the shape of mortgage bond from two permanent Railway employees. 

HBA is granted for the following purposes: 

• Purchase of a plot for construction of a house. 
• Construction of a house on a plot already owned by a Railway employee or jointly with his/her spouse. 
• Enlargement of an existing house. 
• Purchase of a ready built house of flat. 
• Repayment of loan taken from Govt/private sources for constructing a house. 

Cost ceiling 

134 times pay in Pay Band subject to a minimum of 7.5 Lakh and maximum of 30 Lakhs. 

Amount of Advance 

• 34 times the Basic Pay + Grade Pay or Rs. 7,50,000 or the actual cost or repaying capacity whichever is less. 
• For enlargement of an existing house, 34 times the Basic Pay + Grade Pay or Rs. 1,80,000 or the actual cost whichever is less. 
• In case of construction of a house in rural area, the amount of advance is 80% of the actual cost of construction and land. 
• For purchase of plot/land and mount not exceeding 20% of advance in case of single storied and 15% in case of double storied is permitted.

Rate of Interest

• Upto Rs. 50,000 5%
• Upto Rs. 1,50,000 6.5%
• Upto Rs. 5,00,000 8.5%
• Upto Rs. 7,50,000 9.5%

• Penal interest of 2.5% for violating conditions. 
• 0.5% reduction for promoting small family norms. 
• Rate of interest prevalent on the date of release of advance/first instalment shall be applicable. 

Recovery

• Principal - 180 months
• Interest - 60 months

NOTE - 

Purchase of land and construct house – The following month of completing construction or 24 months after granting first installment whichever is earlier.

Construction of house – The following month of completing construction or 18 months after granting first installment whichever is earlier.

Source: Indian Railway Employee