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What Are Bank Approved Real Estate Projects?

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What Are Bank Approved Projects?

As 86.6 percent of the 130 crore people in India own a house, there are still some home buyers who are unaware of what are bank approved projects and the benefits of buying such a property 

Various things need to be considered before home buyers decide to purchase a property. Right from arranging the finance to understanding the authenticity of the real estate developers, the task of buying one’s dream house is not always a cake walk. One of the most important things while home hunting is the task to understand what are bank approved projects and why is it important to purchase such a property.

RealtyNXT encapsulates below the concept of bank approved projects and why is it important to know about it.

Understanding The Term

Bank approved projects refer to those real estate properties whose titles and documents have been examined by the bank thoroughly so that interested home buyers can be assured that the developers are genuine and the project is technically feasible. 

The inspection of the property by the bank is done after the developer requests the bank to do so. After the project is approved by the bank, the home buyer can apply for a home loan from the same bank. The home buyers thus do not need to go through the legal or technical verification of the project themselves.

Responsibility Of Banks

After getting the approval of the bank, it can be assured that the developer of a particular project is trustworthy and there are no problems in its legal, technical or financial end. 

However, home buyers must know that in case of construction delay, banks will not be responsible. The banks will not take any charge to question the developer in such a circumstance. Also, in such a situation, banks will not consider if a borrower defaults on the payment of the monthly EMI. 

It must also be noted that banks may also lend the developers for the construction of the project. A delay or interruption in the construction process also hampers the bank’s return of investment.

Method Of Approval

Banks follow a particular process for approving the project. One of the first things that are checked by them is to verify if the land on which the project is being developed has been approved by the government or not. The bank orders a check of the property’s rights and acquires a report that must mention that the land is free from all legal charges. 

The next step that is taken up by the bank is to check for environmental clearance from the Union Ministry of Environment and Forest. 

After the project has been approved, the banks assign an Approved Project Financial (APF) number to the developers. The APF number confirms that the project has received all the necessary approvals and homebuyers can now invest in it without any tension. 

Benefits

One of the best benefits for home buyers to invest in bank approved projects is that the process of getting approval for the home loan speeds up as the banks have already checked the project regarding its legal and technical aspects. Thus, those willing to opt for a home loan have a faster chance of getting their loans approved.

Moreover, the fact that banks conduct a thorough inspection of the projects also ensures that developers stick to their promises and deliver the project to the home buyers on time. The presence of the banks makes sure that the developer also provides all amenities as listed in the agreement.

Finding Bank Approved Projects

One of the easiest ways to find projects that are approved by a bank is to visit the bank’s website and open the tab that displays the lists of the projects that they have approved. The contact details and location of the approved projects will be available on their website. 

It is always suggested to pre-check with the bank if they have approved the project in which the home buyer is interested to invest in. 

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