On the one hand, fiscal concessions were provided by GoI (under sections 80 C and 24 of I.T.Act) while on the other hand, housing loans upto ₹ 25 lakh given by SCBs were brought under Priority Sector Lending. NPAs being very low and supported by SARFAESI Act, has prompted the financial institutions to make available housing loans at competitively affordable and comparatively lower rates.
Besides, GoI has also implemented Interest Subvention Schemes like 1% Interest Subsidy Scheme, Interest Subsidy Scheme for Housing the Urban Poor (ISHUP) and Rajiv AwasYojana (RAY), etc., in order to make housing loans affordable for the targeted segments. These measures have resulted in improving the demand for housing loans.