If you are an EPFO subscriber and have been planning to buy a home but was just postponing your plans due to financial issues then maybe now is the time to buy one. The Employees Provident Fund Organisation (EPFO) has announced a new housing scheme under which you can withdraw up to 90 percent of your Provident Fund money to buy or build a house. Under the new norms, you are free to invest even in a project built by a private developer.
"We have aligned this Group Insurance Housing Scheme with all other housing schemes of the government so that people can avail the interest subsidy announced by the government under the Pradhan Mantri Awas and other such housing schemes. A group of 10 people can come together and form the housing society and buy or build the housing units," Labour Minister Bandaru Dattatreya told NDTV.
The Minister clarified that EPFO will not be involved in constructing the houses but will just act as a facilitator. The government's plan is to provide 10 lakh homes by 2019 through this new scheme. The government is hopeful that a majority of the nearly 4.5 crore EPFO subscriber would be interested in opting for the housing scheme.
To make the scheme popular and give the necessary push to meet the government's target of Housing for All by 2022, the Labour Ministry and EPFO have eased the rules of the housing scheme. Earlier it restricted the investment to only government housing projects and the minimum number of people to form the housing society was 20 which has now been brought down to 10. EPFO will sanction 90% of the PF money and interest thereon or the cost of the property, whichever is lower, into the subscriber's account.
"It is a good scheme but given the real estate market conditions where thousands of homebuyers are stuck, what the government will have to ensure is that the buyers do not get cheated all over again. Imagine a situation where a 50-55-year-old man invests all his PF money and does not get possession of the house," said Indresh Gupta a homebuyer who invested in a property in Greater Noida West in 2009 and is still waiting to get possession of his house.