How Can EPFO Help You Buy A Budget Home In India

How Can EPFO Make Budget Home Buying EasierNeedless to say that buying a home is one of the most daunting tasks in life. From making the down payment to paying regular EMIs for a home loan, buying a home in India is a long term financial exercise. Even if it is a budget home, you need to arrange money for down payment. For lower middle-class people having limited income and living in rental homes, arranging money even for the down payment is a huge challenge.

Be happy! Soon paying for your dream home in India will get easier.

EPFO Scheme

To make budget home buying easier in India, the Employees’ Provident Fund Organization (EPFO) recently presented a proposal to the Labour Ministry, asking for a new paragraph 68BD as a group housing scheme. The new scheme will allow members to use their provident fund savings to buy home, land or an apartment. However, they need to form a cooperative housing society of 10 or more employees to avail the benefit. The members of the society won’t just be able to use 90 percent of their EPF savings to buy homes but will also be able to pay EMIs for a home loan from the monthly contribution received in their account under Employees’ Provident Fund Scheme, 1952.

How can EPFO help you realize your dream of owning a house?

Down Payment

Accumulating money for down payment of a new home is the most crucial part of buying a residential property in India. By giving power to its 50 million subscribers to utilize their savings to buy homes, EPFO will save home buyers from the stress of arranging down payment.

Cheap housing loans

Present norms don’t allow home buyers to attach their PF contribution for a loan application. At present, an employee can withdraw PF savings equivalent to 36 months of salary for housing loan only after completing 10 years in service. To help subscribers get cheaper housing loans, EPFO is also planning to tie-up with financial institutions.


After making down payment, regular EMI for the housing loan is another problem for the home buyer. The situation gets worse for home buyers living in rental homes and waiting for the possession of their flats. The new scheme has a solution to this problem as well.

Home buyers, who want to use their provident fund savings for the equated monthly installment (EMI) payment, need to sign a tripartite agreement. The agreement will be signed by a home buyer, bank and the EPFO. Subscribers will be allowed to use their future PF contribution as the EMI for a home loan.

affordable home


Apart from buying a home, employees who have completed 10 years of their service can also use their PF savings for house repair. But this is allowed only for a house that has completed five years since its construction.

Other benefits of the EPFO scheme

  1. The government is making every effort to achieve its “Housing For All by 2022″ target. The new scheme will facilitate the mission by helping subscribers buy low-cost housing effortlessly.
  2. Providing housing facility to all has been a huge challenge for the government. Despite launching various schemes, the government found it difficult to facilitate homes for lower middle-class buyers. By providing ready funds to these home buyers, the EPFO will definitely help the government.
  3. Due to a stagnant market and demonetization, Indian real estate sector has got a pile of unsold housing inventory. Home loan schemes by the retirement fund will revive the real estate sector by boosting sale of affordable homes.

Along with this, the organization is also planning to launch a scheme to fund low-cost housing for the subscribers. Discussion on the same has been going on.

All in all, the new EPFO scheme will be beneficial for all: developers, the government and home buyers. While home buyers will get financial support, builders will see an increased demand for budget homes.

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