Pay Your Home Loan EMI Through EPF 2017

To give boost to “Housing for all” scheme, the Government has tweaked the rules pertaining to employees’ Provident fund scheme by enabling the individuals to pay equated monthly installments (EMI) of home loans through EPF.

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Members of Employees’ Provident Fund Organization (EPFO) can now withdraw money from their EPF accounts to fund the purchase, construction of house or flat or to buy land. They can also use their PF for part or full payment of home loans. Individuals can also use their retirement funds to purchase, construct a house or purchase of land. These are basic points to look for in the new Government scheme.

  • EPFO members will be able to withdraw up to 90% of their accumulation in the PF account or the cost of the property, whichever is less to provide for the purchase or construction of house/flat or for buying land.

  • For payment of EMI through one’s EPF account, banks or lending institutions will consider the contributions made to an employee’s PF account over the past three months to calculate the EMI.

  • Payment will be made by the EPFO directly to the housing society, the Government agency, the bank or the prime lending institution and not to the member of EPFO.

  • If the member fails to get alloted a dwelling, a flat or in case of cancellation of the allotment, the amount has to be refunded to the EPFO within 15 days.

  • If the amount withdrawn exceeds the actual money spent, the excess money should be refunded within 30 days of finalization of purchase or construction of house or flat.

  • This scheme is a part of the Government’s “Housing for all” scheme. The Government has recently launched a scheme calledPradhan Mantri Awas Yojna under which people, whose annual income is less than a specified amount and who do not own any house in the name of any family member anywhere in India, can avail an interest subsidy of up to ₹2.20 lakh.

Condition to Withdraw Money from EPF

  • The EPFO member has to be a member of the co-operative society or a society registered under any law for housing purpose and should have at least 10 members.

  • The employee should be a member of EPFO for at least 3 years.

  • The accumulation in the member’s PF account, including the interest must be more than ₹20,000.

  • The amount from the EPF account can be withdrawn only once.