Section 17 in Regulations For The Disbursement of Loans Under The Low Income Group Housing Scheme, 1968
17. Disbursement of Loan. A - Loan for construction of a house.
(1)Loans shall be advanced in three instalments consisting of 25 per cent. according to the progress of the construction of the house and in no case shall the loan be advanced in lump sum.(2)The first instalment, equal to 25 per cent. of the total amount of the sanctioned loan shall be released only when the Housing Commissioner is fully satisfied on the basis of the evidence produced by the borrower that he possesses a plot of land within the city or the municipality where he proposes to construct a house and that he has invested from his own resources at least 20 per cent. of the total estimated cost of the land and house.(3)The second and third instalments not exceeding 50 per cent. and 25 per cent. each of the sanctioned loan, respectively shall be paid when the house in question is verified to the satisfaction of the Housing Commissioner to have been constructed in accordance with the sanctioned plan up to plinth level and roof level, respectively.(4)Sub-paras (1), (2) and (3) above indicate the stages in which the loan will be advanced to individuals. In case of loan to institutions the loan will be advanced in three stages, i.e., 20 per cent. of the loan will be payable on the applicant's executing agreement in the prescribed form with the Parishad in case the institution intends to purchase land or in case it is already possessed of land and can undertake construction immediately; 50 per cent. on its executing a mortgage of the land and building to be erected thereon and when the construction reaches plinth level stage; the last instalment of loan will be paid only when the construction reaches the roof level stage and the essential services like water-supply, street lighting, drainage, sewage and laying of roads, etc., in the area/colony have been reasonably provided.(5)If the amount of the first instalment of the loan is not drawn within three months from the date of sanction, the loan may be cancelled.(6)The Housing Commissioner shall satisfy himself that the house has been completed according to plan and specifications and the borrower shall furnish a certificate to the Housing Commissioner to this effect from the competent authority.(7)The advance for purchase of a newly built house and the land on which it stands or land shall be sanctioned in one lump sum after the borrower has furnished the security required therefor under these regulations :The amount of the loan sanctioned for the purchase of a house and land on which it stands shall not be released unless the Housing Commissioner is satisfied that the borrower has settled the purchase of a suitable house and has completed the preliminary formalities including those prescribed in regulation 8 (h) (i) and has furnished the security prescribed under these regulations.
