HDFC – Islamic Finance Facilities
Home Costruction (Isthisnau)
This facility is a Sharia compliant financing facility to construct a House or an Apartment for the purpose of residential/rental to be occupied by owners/ co-owners/tenants. Under this facility the project will proceed jointly with the client and HDFC. Client will provide land and HDFC will provide funding under Islamic financing model of profit-share where finance will be directly provided to contractors/suppliers under the direction of the customer (partner in the venture).
Purchase of land and Construction or purchase of Housing Unit (Musharaka Mutha nagisa)
i) Must have a minimum of one co-applicant who has a legal connection to the property, by inheritance/marriage (40% of the pooled monthly income is considered for servicing the Islamic facility), or with an independent guarantor acceptable to HDFC. The total income of borrowers considered for eligibility is given in the chart below.
|Monthly Income Range (MVR)
|EMI / Monthly Income percentage.
(Inclusive of all fixed loan installments)
|Less than 6,000.00
|6,000.00 to 10,000.00
|More than 10,000.00
ii) Maximum age of an applicant for the income to be considered is up to 65 or age of retirement, whichever is lower, on or before the maturity of the facility.
iii) All co-owners to the property offered as security must be co-applicant or a legal waiver is required. Other than court-directed cases, only one who has reached the age of majority would be a party to the facility agreement.
iv) Applicants could be individuals above 18 years of age or legal entities.
v) If the co-owner is an individual, he/she must be part of the immediate family viz. father, mother, children, and spouse.
vi) Owner/co-owner must be a major or apply through a legal guardian.
vii) In case the owner is a limited Company, Registrar of companies (ROC) search is mandatory, along with all the relevant board resolutions.
Property offered for Mortgage
i) First charge primary mortgage of the land on which, housing is developed.
ii) The property offered as security must be located within the defined geographical location.
iii) The outer islands (outside greater Male’) are vetted (see ii above), and approved for finance to develop housing on land offered for mortgage having fair value (value of property must cover the Islamic Financing facility), and as published by HDFC from time to time. All other areas are classified as areas with no acceptable fair value and customers must apprise themselves before making applications.
i) Total sale value of the housing construction.
ii) Maximum borrowing up to 80% of the sale value or construction cost.
iii) The facility tenure is up to 15 years.
iv) Grace period is up to 12 months.
Fees and other charges
i) Revenue Stamp MVR 25 is required for Mortgage agreement to register in the court.
Modes of servicing the facility:
• Monthly deduction from salary (if the deduction is agreed by the HDFC approved employer (maximum 60% of the salary can be considered for deduction).
• Bank standing order
• Direct deposits through bank transfer etc.