House Building Advance (HBA) Rules 2025 – Complete Guide for Central Government Employees

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House Building Advance (HBA) Rules 2025 – Complete Guide for Central Government Employees





The Ministry of Housing & Urban Affairs (MoHUA) has released a Comprehensive Compendium of House Building Advance (HBA) Rules and FAQs, updated up to 31 July 2025. This consolidated reference compiles all Office Memorandums (OMs), amendments, and clarifications issued since 1956 regarding House Building Advance.

This guide provides a structured overview of the latest HBA rules, including eligibility criteria, financial limits, repayment norms, mortgage and insurance conditions, migration facility, and essential FAQs for Central Government employees.

1. What is House Building Advance (HBA)?

House Building Advance (HBA) is a long-term loan provided by the Central Government to eligible employees for the following purposes:

  • Construction of a new residential house

  • Purchase of a plot and construction

  • Purchase of ready-built houses/flats

  • Expansion of existing residential accommodation

  • Repayment of earlier home loans

  • Construction through Cooperative Housing Societies

  • Migration of existing bank home loans to the HBA scheme

Note:
Only one HBA can be availed during the entire service of an employee.

2. Eligibility Criteria

HBA is admissible to the following categories:

  • Permanent Central Government employees

  • Employees with a minimum of 5 years of continuous service

  • All India Service (AIS) officers on Central deputation

  • Central Government employees serving in Union Territories

  • AIR/Prasar Bharati employees on long-term contracts

  • Employees on deputation (applications processed by parent department)

Additional Conditions:

  • Both spouses employed under the Central Government may individually avail HBA.

  • Employees under suspension are also eligible but must provide adequate collateral security.

3. Cost Ceiling Limit

The cost of construction or purchase (excluding land value) must not exceed:

  • 139 times the Basic Pay, or

  • ₹1 crore,

whichever is lower.

The Head of Department (HoD) may relax this limit by up to 25% in duly justified cases.

4. Maximum Amount of HBA

A. Construction/Purchase of House/Flat

The admissible amount shall be the lowest of the following:

  • 34 months’ Basic Pay

  • ₹25 lakh

  • Actual cost of the property

  • Repayment capacity of the employee

B. Expansion of Existing House

  • Up to ₹10 lakh,
    subject to 34 months’ Basic Pay and repayment capacity.

C. Rural Area Relaxation

  • Normally up to 80% of the cost.

  • May be enhanced to 100% with HoD certification.

D. Both Spouses Employed

  • Both spouses may independently avail the full HBA limit, subject to eligibility.

E. NPA for Doctors

Non-Practicing Allowance (NPA) is treated as Basic Pay for HBA calculations.

5. Repayment Capacity

Repayment capacity depends on the remaining service tenure:

Remaining ServiceRepayment Capacity
20 years or moreUp to 40% of Basic Pay
10–20 years40% of Basic Pay + 65% of DCRG
Less than 10 years50% of Basic Pay + 75% of DCRG

6. Interest Rate (FY 2025–26)

For the period 1 April 2025 to 31 March 2026, the applicable interest rate is:

7.44% per annum (Simple Interest)

  • Interest recovery starts only after full recovery of the principal.

  • Maximum recovery periods:

    • Principal: up to 180 instalments

    • Interest: up to 60 instalments

7. Disbursement Rules

1. Purchase of Ready-Built House/Flat

  • 100% of HBA is released after execution of the agreement.

  • Property must be mortgaged within three months.

2. Construction of House

  • Disbursed in two instalments of 50% each:

    • First instalment: after execution of mortgage

    • Second instalment: after construction reaches plinth level

3. Purchase of Plot + Construction

  • 30–40% released for plot purchase (based on the type of house).

  • Balance is released in two instalments after mortgage and upon reaching plinth level.

8. Recovery of HBA

Recovery commences as follows:

  • Construction: From the month following completion or 18 months after first instalment, whichever is earlier

  • Plot + Construction: After completion or 24 months from the first instalment

  • Ready-built Purchase: From the month following the release of advance

In case of death of the employee, no interest is charged on amounts recovered from DCRG.

9. Mortgage Rules

  • The property shall be mortgaged in favour of the President of India.

  • A second mortgage may be permitted with prior NOC.

  • All expenses related to stamp duty and registration for mortgage/reconveyance shall be borne by the employee.

For jointly availing spouses:

  • One department shall retain the original documents.

  • The other department shall issue the necessary NOC.

10. Insurance Requirement

The property must be insured immediately after completion against:

  • Fire

  • Flood

  • Lightning

Failure to insure the property attracts 2% penal interest.

11. Migration from Bank Home Loans to HBA

Employees with existing housing loans from banks/financial institutions may migrate to HBA if:

  • The earlier loan was exclusively used for construction/purchase.

  • HBA is sanctioned only for the outstanding loan amount.

  • The employee was eligible for HBA on the date the initial bank loan was taken.

  • HBA is released in a single instalment.

  • Utilisation Certificate must be submitted within one month.

12. Reconveyance of Property

After full recovery of principal and interest:

  • The property is reconveyed back to the employee.

  • Reconveyance deed is registered as applicable.

  • Original mortgage documents are returned.

In case of the employee's death, reconveyance is executed in favour of the legal heir after obtaining NOCs from other heirs.

13. Priority Order for Sanction of HBA

Applications are processed in the following priority:

  1. Ongoing construction cases

  2. Employees retiring within the next five years

  3. Ready-built house/flat purchase cases with due dates

  4. All other applications

14. Other Important Rules

  • Small Family Norm rebate discontinued from 1 July 2017.

  • Employees owning a house in the same town are generally not eligible, except for limited 60% HBA in joint/coparcenary property cases.

  • Annual House Maintenance Certificate must be submitted.

  • Insurance delays beyond two years require approval at the Ministry level.

Conclusion

The HBA Compendium 2025 provides a unified and updated reference for all existing House Building Advance rules applicable to Central Government employees. Individuals planning to construct, purchase, or expand their residential accommodation should carefully examine these guidelines to ensure eligibility, avoid delays, and facilitate smooth processing of their HBA application.

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