More Affordable Housing Finance expected as SEBI eases MF investment norms

In what could be a big boost to the affordable housing finance in India, SEBI has eased norms for debt faced mutual funds to invest in housing finance companies. Mortgages play an important role in the government’s plan for affordable housing. A significant portion of house purchase is facilitated through home loans.

Earlier, debt-themed mutual funds could invest only up to 10% in housing finance companies and now the limit has been hiked to 15%. This is over and above the sectoral limit of 25%.

If seen in the context of government’s push to the Pradhan Mantri Awaas Yojna, this is a significant step which will see additional fund flowing into housing finance companies. In turn, additional capital would enable more loan disbursals for housing.