Employees’ Provident Fund: How EPFO may help you in realising your housing dream

Buying own house is a dream come true for everybody. However, while selecting the dream home at a preferred location and that too within budget is a difficult task, arranging funds to buy the house of your choice is even more difficult.

Apart from some super-rich people, paying the price of a house out of pocket is not possible for others. So, one has to arrange money for down payment as well needs to get a home loan to buy a house. 

Banks generally don’t give more than 80 per cent of a house price as home loan, so a home buyer need to pay at least 20 per cent of the total price as down payment.

If you pay more money as down payment, the less will be the amount of home loan, resulting in lesser interest payable and lesser EMI amount.

So, apart from availing the home loan from an institution charging lower interest rate on home loan, it is very important to pay down payment as much as possible to reduce the home loan burden.

To arrange the down payment, you should have made investments well in advance so that at the time of buying a house, you have a built up corpus sufficient to make at least the minimum down payment.

People working in private sector organisations may take out money accumulated in their provident fund (PF) account up to a permissible limit in order to make down payment.

The good news is that the Employees’ Provident Fund Organisation (EPFO) would not only help you in buying a house by providing the PF money for down payment, but workers and employees may form an association to get help from EPFO in all the steps in getting the dream home.

As a part of the Housing for All by 2022 initiative, EPFO aims to provide 10 lakh dwelling units in association with Ministry of Labour and Employment.

The EPFO would play a pivotal role in bringing together all stakeholders, namely ? workers, employers, financial institutions and housing agencies to provide affordable houses to the workers.

The EPF members may avail the benefits through following steps: 

  • Register a society with 10 or more members.
  • Apply to the concerned PF office through the society for getting Certificate of Fund and Contribution.
  • Banks/Financing Agencies can make use of certificate issued by the PF Commissioner to arrive EMI for withdrawal under Para 68 BD (3) of EPF Scheme.
  • Society arranges housing units from public / private housing providers.
  • Upfront payment and installments to be paid directly to the Cooperative Society, Central Government, State Government, Housing Agency, Promoter or Builder.

The EPFO will also help the EPF contributors by allowing withdrawal of up to 90 per cent of accumulations in Provident Fund Accounts and by facilitating full/part repayment of loans out of monthly PF contributions.

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