Mumbai: Maharashtra State Housing Authority (MHADA) has come up with sops for builders and developers undertaking the construction of skyscrapers.
According to its revised circular, on payment of a premium money on fungible Floor Space Index (FSI), builders undertaking the construction of buildings of 70 metres and above can make EMI payments in 48 and 60 months respectively.
Moreover, it has also reduced the percentage on the rate of interest to 8.5 from 22.5 in a bid to push the real estate projects on its layout. Also, the facility of installments will be allowed only when the minimum payable amount is Rs 50 lakh and above.
Fungible FSI is the additional floor area developed by the builder over and above the FSI limit set by the government. Any builder or developer interested to apply for the installment facility has to submit the registered undertaking so that the MHADA can initiate action against the defaulters.
MHADA believes the offer will not just help the real estate sector suffering from liquidity crunch but also help them to generate housing stock for lottery draw held every year. However, the offer is only valid for two years.
Since these newly made modifications introduced on December 11 replace the previously issued circular of September 2018, MHADA has made it clear that developers and builders, who desire to take the benefit of reduced rate of interest, are liable to pay as per the previous rate of interest.
While the real estate projects where the intimation of disapproval/ intimation of approval given before September 2018 issued circular in such cases the first installment will be paid as per the demand letter and for remaining installments will be revised as per the new modification, however, gross period of project shall not exceed the maximum period of the modified circular, it says.
According to MHADA, the new decision will incur an annual loss of nearly Rs 50 crore and may cause cash crunch for its big projects like BDD Chawls.
However, about 200 cessed building projects which are stuck due to cash crunch and premium payment issue, could see fresh lease of life.
Rajan Bandelkar, president, NAREDCO - Maharashtra commented: "This is a positive step taken by MHADA, which will help the developer community in completion of their projects.”