The loan to be availed from the Housing and Urban Development Corporation (HUDCO) for the third phase of the government's LIFE housing project in urban areas will be repaid by making upfront deduction of the required amount from development grants of local bodies.
The government had last year accorded sanction for availing loan for ₹1,500 crore from HUDCO for providing houses to SC, ST, and fisheries beneficiaries on the additional list and those landless homeless beneficiaries who have acquired land.
Out of the total loan amount, ₹51.66 crore will be taken by Kerala Urban and Rural Development Finance Corporation Limited (KURDFC) for the construction of 2,583 houses in urban areas.
The loan amount will be passed on by the KURDFC to the LSGIs concerned as per the number of houses to be built in each local body based on the recommendation from the LIFE Mission. Along with the loan amount, the grant provided by the government and the own share of the respective local bodies will be added to provide the required funding for houses.
The government will repay the principal for the loan availed by making upfront deduction of the required amount from the development grant set aside for local bodies in the State Budget. The deducted amount will be made available to HUDCO through the KURDFC at the beginning of every financial year. The maximum tenure of the loan repayment is 15 years.
The local bodies will enter into an agreement with the KURDFC to facilitate the deduction of development grant. Considering the burden of loan repayment, sufficient allocation will be made in the Budget annually during the repayment period.
Arrangements will also be made for repayment directly from the government in case of shortfall in the development grants of any local body. The LIFE Mission will submit a proposal for additional grants for local bodies with a high number of houses to be built, as deduction of the grant can affect fund availability for other purposes.
