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Even NRIs can take home loans if they wish to purchase a residential property. They can buy house and can also take loan for the purpose of renovation, improvement, self construction, etc of the new or existing possessions in India. just like the people who live in India, even the Non residential Indians are allowed to avail home loans upto a maximum of 80 -85 % of the real cost of the property. However, all this requires immediate down payment of remittances from abroad via NREs, NROs or regular banking channels. The equal monthly instalments also must be made via any of the three above written options only.

But for all NRIs, there are some pre requisites like past experience, current job profile, qualifications, probability of replaying the loan, etc are required to be taken into consideration. For all NRI customers, the LTV or Loan-To-Value ratio varies in different banks, although the way in which this ratio is calculated, is same for all regular home loans. The amount of income that is taken into consideration for the purpose of calculating the eligibility of home loan is the returnable income along with any incomes that is earned from India. For Non-Residential Indians, working in countries like Africa, etc where repatriation is restricted, only that part of the income which is returnable, is considered for eligibility of the home loan.

Generally, the tenure of regular home loans can be to a maximum of 25 years, but the tenure of loan for NRIs is limited to 10-15 years only. Along with all the standard documents that are required for getting a home loan, the NRIs are required to submit some additional documents like appointment letter, contract, salary certificate, income tax returns, bank statements, etc of the other country as a proof of his employment and account in the resident country.

The eligibility of the loan can also be increased if a joint loan is taken with a relative. But, due to certain limitations and reasons, banks accept only a select list of relatives to act as the shared possessors of the property. It is very necessary for the NRI to provide a general power of attorney that is in favour of the relative who is trustworthy, in accordance with the bank draft that needs to be properly attested by the Indian consulate residing in the residence country of the NRI. If the borrower of loan is in India, the Power of Attorney can also be notarised locally. Most of the banks require that the POA is given so that the dealing process with the NRI borrower is easy and smooth.

The holder of the POA gets only the power that the borrower gives, but he has no power to deal with the property for which the loan has been taken. Just like the Indian residents, even the NRIs have some tax benefits on interest payments that are very helpful of the NRI has a kind of taxable income in India.

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