How Does the Changed PF Rules Pattern Affect Your Home Buying Decision

Government’s initiative of “Housing for All” to be achieved by 2022 has brought about a tremendous change in the real estate sector. Home buying has been made more favorable than ever. Home Loan EMI has been made borrower friendly. The policies such as Pradhan Mantri Awas Yojana (PMAY), the introduction of MCLR and the revised EPFO has all been beneficial for the borrowers seeking Home Loans or Land Purchase Loan.

The Employees’ Provident Fund Scheme rules have been amended by the government. This has proved to be a boon to around four crore subscribers who are now required to pay equated monthly installments. Their funds can now also be used towards the purchase of land or construction of houses. This is a part of the agenda that the government desires to achieve by the year 2022.

Employees’ Provident Fund Organization (EPFO) is a body which handles retirement funds. It manages provident funds saving of the employees. This has led to a significant boost in the housing sector. Home construction loan can be availed now and one can gain a lot through revised Home Loan interest rates which have been brought down by the government.

Here are certain things you should know about the EPFO rules being changed by the government for paying Home Loan EMIs:

• Higher withdrawal:

People part of EPFO will now be able to withdraw 90% of their amount in their PF accounts for the purchase of houses, construction of houses or land purchase.

• Co-op society Member:

Although it is helpful, the government has made sure that this benefit goes out to the people who are seeking homes in the registered property. Thus a person looking to avail this service should be a member of a cooperative society which has at least 10 members.

• EPFOs’ involvement:

If you are looking forward to buying property or home, EPFO will make the payment on your behalf, and not you.

• Monthly installments:

The new rules now enable the EPFO subscribers to pay their monthly installments concerning home purchase from PF deposits. Government, primary lending agency, banks or housing agency will directly be paid.

• Application:

According to the new scheme, a subscriber has to apply to the Employee Provident Fund Organization to avail these facilities.

These were the basic new introductions that have been brought about by the government. Apart from this, an EPFO subscriber has to fulfill certain criteria and conditions to be able to avail the withdrawal facility. It is essential that the member must have contributed to the fund for over 3 years. Also, an individual can ask for this facility only once during his/her lifetime.

The basic requirement of the scheme is you and your spouse must be subscribed to the EPFO scheme and have at least INR 20,000 in your accounts. Home Loan EMI which can easily be calculated using Home Loan EMI calculator online, thus has been made easy for the borrowers to repay. The government has also provided settlement feature if anything goes wrong. For instance, if a member cancels the flat or in any uncertain event he fails to get hold of the allotted flat the withdrawn amount will be refunded to him in a lump sum. The period in which the payment will be completed will not exceed fifteen days.

Employees’ Provident Fund Scheme has thus brought about a positive and borrower friendly impact. The government is planning the policies for the interest of all the parties involved and its smooth functioning. It's essential to be aware of the changes in Provident Fund Rule made by the government to make the most of your EPF.