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The Housing Promotion and Finance Corporation (HPFC) has been constituted recently with the collaboration of the State Bank of India and Housing Development Finance Corporation (HDFC). The above corporation aims at giving loans on long-term basis to the middle and low-income groups for the purchase, construction and extension of the houses. Besides the 25 crore rupees as authorized capital, five crores has been invested as the paid up capital. When considering the faster developments in Real Estate Ernakulam district is ahead of other destinations mainly due to the availability of easier funds for real estate development.

As per the scheme of the HPFC, the loan can be given to individuals, group of individuals, members of Housing Cooperative Societies and builders of multi-storeyed buildings. According to the individual Finance Scheme, a person can incur a loan of a maximum amount of Rs. 3 lakh, or 70 percent of the total cost of the house (including the price of the land). Individuals incurring a loan of Rs. 1 lakh or below are to repay it with interest of 12.5 to 14.5 percent within 20 years and above an amount of one lakh with similar interest within 15 years. Interest @ 1.5 percent would be recovered on delayed Easy Monthly Installments (EMI) payments.

The study of expenditure on housing development made by the public and private sectors since 1951 indicates that the public sector investment up to the Seventh Plan was only 11.1 percent, whereas the private sector had invested nearly 88.9 percent. It is also significant that while investment in the public sector increased marginally over the successive plan periods, there was a substantial rate of increase in the investments, by the private sector into housing development. This shows that the private sector was taking full advantage for expanding the housing market and profiting by it.

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