Reverse Mortgage Scheme For Senior Citizens
Pursuant to the announcement made in the Union Budget speech 2007-08, that “National Housing Bank will introduce a novel financial product for senior citizens; a ‘reverse mortgage' under which a senior citizen who is the owner of a house can avail of a monthly stream of income against the mortgage of his/her house, while remaining the owner and occupying the house throughout his/her lifetime, without repayment or servicing of the loan”, the National Housing Bank (NHB) formulated the Operational Guidelines for Reverse Mortgage Loan (RML), after taking into account the feedback and suggestions of the senior Citizens, the public and the Technical Working Group constituted by NHB, in this regard.The RMLs are to be extended by Primary Lending Institutions (PLIs) viz. Scheduled Banks and Housing Finance Companies (HFCs) registered with NHB.The the main features of the RML are:
1.It aims at partially meeting the financial needs of Senior Citizens who may, otherwise be not eligible for availing any kind of financial assistance under conventional bank loan schemes.
2.RML enables monthly payments that supplement the income of senior citizens during their lifetime when their income sources are generally restricted/limited and show a marked fall as compared to the period when they were in active occupation.
3.RML obviates the need for senior citizens to meet emergent financial needs by selling their house and perhaps moving to a smaller house possibly located far away, to raise money.
4.Helps in unlocking the wealth otherwise locked in a residential asset.
5.Expenses like health care and other needs which are generally expected to rise with ageing can be met from the payments received under RML.