New Delhi: The government is firming up a zero-collateral housing loan scheme for low- and middle-income groups which will offer up to Rs 20 lakh with minimal documentation or third-party guarantee, said people familiar with the matter.

Amendments to the Credit Risk Guarantee Fund Scheme for Low-Income Housing (CRGFTLIH) are being examined to pave the way for the scheme, they said, adding that the loan could have a tenure of 30 years.

Under the existing provisions, housing loans up to Rs 8 lakh are eligible for guaranteed cover. "The idea is to make credit available for those homebuyers who do not have any documented income or minimal supporting documents," a government official told ET.

Talks are on between the ministries of finance and housing & urban affairs, National Housing Bank and other commercial banks to firm up the parameters such as eligible income and equated monthly installment and net monthly income ratio.

A bank executive said up to 70% of the loan amount in default will be guaranteed under CRGFTLIH.

DIGITAL FOOTPRINT

He said changes to its operational guidelines dealing with the extent of the guarantee and coverage period are being examined.

"We will also incorporate the digital footprint of a borrower including payments for utilities as a parameter for loan assessment risk under this scheme," he said.

Banks are developing a new credit assessment model for small and medium enterprises which will consider digital transactions and cash flows such as salaries paid to employees, electricity bills, municipal taxes and contributions towards employee provident funds rather than traditional parameters such as tax returns and other collateral.

As per the existing provisions, households from economically weaker section (EWS), which have an annual income of up to Rs 3 lakh, are considered, as lower income group (LIG) households, with an annual income of Rs 3-6 lakh, and middle-income group households, with an annual income of Rs 6-9 lakh.

In July, Finance Minister Nirmala Sitharaman had announced in the Union budget that the government would come out with an interest subsidy scheme to facilitate loans at affordable rates for urban housing.

In August, the government increased the corpus fund of Credit Risk Guarantee Fund Trust (CRGFT) to Rs 3,000 crore from Rs 1,000 crore to provide the benefit of credit risk guarantee on affordable housing loans to EWS and LIG households.

Under Pradhan Mantri Awas Yojana-Urban 2.0, government assistance of Rs 2.30 lakh crore will be provided to 10 million urban poor and middle-class families through states or union territories to construct, purchase or rent a house at an affordable cost in urban areas in five years.