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NRI Corner

The Non-Resident Indians (NRIs) are recognized under the Foreign Exchange  Regulation Act, 1973 - "An Indian citizen who holds a valid document like an Indian  passport and who stays abroad for employment or for carrying on business or vocation  outside India or stays abroad under circumstances indicating an intention for an  uncertain duration of stay abroad is an NRI.

Non-Resident Indians qualifying for NRI housing loans are: 

  • Indian citizens who stay abroad for employment or for carrying on business or  vocation outside India or for any other purpose in circumstances indicating an  indefinite period of stay abroad
  • Government servants who are posted abroad on duty with the Indian missions  and similar other agencies set up abroad by the Government of India, where the  officials draw their salaries out of Government resources 
  • Government servants deputed abroad on assignments with foreign Governments  or regional/ international agencies like the World Bank, International Monetary  Fund (IMF), World Health Organization (WHO), Economic and Social  Commission for Asia and the Pacific (ESCAP)
  • Officials of the State Government and Public Sector undertakings deputed abroad  on temporary assignments or posted to their branches or offices abroad

Documents required for Resident Indians and NRIs for getting home loans are different  in some respects. Home loans for NRIs are available for construction of new houses/  flats, purchase of old house/ flat addition/ alteration to an existing house and repairs/  renovation etc. NRIs can avail of loans by mortgaging an existing residential property.  However, for availing home loans, NRIs have to fulfill certain conditions, according to  the provisions of the Income Tax Act. They should have stayed in India for a period of  182 days or more within an assessment year or they should have stayed in India for at  least a total of one year or more.


Age Qualification Income Payment options Number of dependants
The loan applicant has to be 21 years of age. The NRI loan seeker has to be a graduate. The loan applicant has to have a minimum monthly income of $ 2,000 (although, this criterion may differ across HFCs). The eligibility is also determined by the stability and continuity of employment or business. The NRI also has to route his EMI (Equated Monthly Instalment) cheques through his NRE/ NRO account. He cannot make payments from another source such as, his savings account in India. The eligibility of the applicant is also determined by the number of dependents, assets and liabilities.

Home loans for an NRI applicant ranges from a minimum of INR. 5 lakhs to a maximum  of INR. 1 crore, based on the repayment capacity and the cost of the property, which  although is variable by the priorities of the home loan provider. An applicant will be  eligible for a maximum of 80% of the cost of the property or the cost of construction as  applicable and 75% of the cost of land in case of purchase of land, based on the  repayment capacity of the borrower.

However, the eligibility can be enhanced by applying for home loans with a co-applicant  who has a separate source of income. Also, the rate of interest for home loans to NRIs is  higher than those offered to Resident Indians. The difference is somewhere between  0.25%-0.50%. Some HFCs also have an internally earmarked 'negative criterion' for NRI  home loans. As such, the NRIs who hail from locations that are marked as being  'negative' in the books of HFCs, find it difficult to get a home loan. 


The Reserve Bank of India (RBI) has clarified that Non-Resident Indians (NRIs) and  Persons of Indian Origin (PIO), purchasing immovable property in India must pay for  the acquisition by funds received in India through normal banking channels by way of  inward remittance from outside the country.  

The NRIs and Resident Indians can also acquire immovable property in India other than  agricultural property, plantation or a farmhouse. It has issued certain directives for  sanctioning home loans to Non-Resident Indians.

The guidelines provided are:-

  • The home loan amount should not exceed 80% of the cost of the dwelling unit, As  the remaining 20% needs to be provided by one's own contribution towards the  cost of unit financed
  • The cost of dwelling unit which is by own contribution financed less the loan  amount, can be met from direct remittances from abroad through normal  banking channels, the Non-Resident (External) [NR(E)] Account and/ or Non Resident (Ordinary) [NR (O)] account in India 
  • However, repayment of the loan, comprising of the principal and interest  including all the charges are to be remitted to the HFC from abroad through  normal banking channels, the Non-Resident (External) [NR(E)] Account and /or  Non-Resident (Ordinary) [NR (O)] account in India 

The repayment option for NRIs is that they can pay through the funds held in any non resident account maintained in accordance with the provisions of the Foreign Exchange  Management Act, 1999, and the regulations made by the RBI from time to time.


Apart from the documents mentioned below, a vital document required while  processing any NRI home loan is the ‘Power of Attorney’ (POA). Since the borrower is  not based in India, the POA is important because HFCs would need a 'representative' 'in  lieu of' the NRI to deal with if necessary. Although not obligatory, the POA is usually  drawn on the NRI's parents/ wife/ children. 

The documents needed for obtaining NRI home loans are: 

  • Passport and Visa 
  • A copy of the appointment letter and contract from the company employing the  applicant
  • The labour card/ identity card (translated in English and countersigned by the  consulate) if the person is employed in the Middle East Salary certificate (in  English) specifying name, date of joining, designation and salary details  ? Bank Statements for the last six months.
  • Bank Statements for the last six months

List of Classified documents for Salaried and Self Employed NRI Applicants: 

Salaried NRI Applicants Self-Employed NRI Applicants
Copy of a valid passport showing visa stamps Passport copy with valid visa stamps
Copy of valid visa/ work permit/ equivalent document supporting the NRI status of the proposed account holder Brief profile of the applicant and business/ Trade license or an equivalent document
Overseas bank A/C for the last 3 months showing salary credits 6 months overseas bank account statements and NRE/ NRO account
Latest contract copy evidencing salary/ salary certificate/wage slips Computation of income, P&L account and B/Sheet for last 3 years certified by the C.A. / CPA or any other relevant authority as the case may be (or equivalent company accounts)

Property documents:-

  •  Original title deeds tracing the title of the property for at least a period of last 13  years
  • Encumbrance Certificate for the last 13 years
  • Agreement of sale/ construction, if any
  • Receipts for payments made for purchase of the dwelling unit
  • Approved plan/ license
  • ULC clearance/ conversion order, etc.
  • Receipts for having invested the margin money through normal banking  channels from the Non-Resident (External) account in India and/ or the Non Resident (Ordinary) account in India
  • Latest tax paid receipt  
  • Allotment letter from the co-operative society/ association of apartment owners 
  • Agreement for sale/ sale deed/ detailed cost estimate from the Architect/  Engineer for property to be purchased/ constructed/ extended/ improved
  • Copy of approved drawings of proposed construction/ purchase/ extension  

Additional documents to be submitted by person of Indian origin Photocopy of PIO card  

If the PIO card is not available, photocopies of any of the following documents

  • The current passport with birthplace as 'INDIA
  •  The Indian passport, if held by the individual earlier
  •  Parent’s/Grandparent’s Indian passport/ Birth Certificate/ Marriage Certificate  substantiating the individuals claim as a person of Indian origin 


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