18 Feb Bank Finance for Real Estate Development
Posted at 05:39h in Business, Uncategorized 0 Comments
Yes. It is possible. No. Real estate funding is still a taboo for Banking sector. However, there is a minor relaxation. In some cases, it is possible to get real estate funding if certain conditions are satisfied.
- The Real Estate Developer should have completed at least three projects in time.
- Proposed project’s land should have been transferred in the name of the real estate developer.
- It is possible to have power of attorney based projects, finance through banks. However, this will not go through in the first attempt. This can be resorted to only from the second loan.
- Project funding will be to the extent of 50% of the project cost.
- Project land should be mortgaged to the Bank.
- Bank will release piecemeal NOC for UDS land registration.
- Proportionate loan should be closed as soon as UDS is released.
- The loan should be closed within a period of eighteen months to two years.
- In addition to the above, the collateral security should be offered to the extent of 50% of the loan amount (25% of the project cost).
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