The Employee Provident Fund Housing Scheme is a beneficial initiative introduced to help employees secure their dream homes. The scheme leverages the savings accumulated in the Employee Provident Fund (EPF) to facilitate the purchase, construction, or repayment of a home loan. This initiative has become a cornerstone for many employees aspiring to become homeowners without the burden of extensive financial strain.
 

What is the Employee Provident Fund (EPF)?

The Employee Provident Fund (EPF) is a government-managed retirement savings scheme for employees in India. Under this scheme, both the employer and the employee contribute a fixed percentage of the employee's salary towards the fund every month. The accumulated amount, along with interest, is made available to the employee upon retirement or under specific circumstances such as purchasing a home.
 

What is the EPF Housing Scheme?

The Employee Provident Fund Housing Scheme allows EPF members to withdraw a portion of their accumulated provident fund savings to purchase or construct a house. This scheme was introduced by the Employees' Provident Fund Organisation (EPFO) to assist employees in fulfilling their housing needs. It serves as an alternative to traditional home loans, reducing the dependency on high-interest borrowing options.
 

Benefits of the Employee Provident Fund Housing Scheme

1. Ease of access to funds: One of the primary benefits of the Employee Provident Fund Housing Scheme is the ease of accessing funds. EPF members can withdraw up to 90% of their accumulated savings for the purpose of purchasing or constructing a home. This provides a substantial financial boost, making homeownership more attainable.
2. Lower financial burden: The scheme reduces the financial burden on employees. Unlike traditional home loans that come with significant interest rates, utilising EPF savings for housing purposes eliminates the need for additional borrowing or high-interest repayments. This makes it a cost-effective solution for home financing.
3. Encourages savings and home ownership: By linking EPF savings to home ownership, the scheme encourages employees to save diligently during their working years. The prospect of using these savings for a significant life goal like purchasing a home motivates employees to contribute consistently to their EPF accounts.
4. Tax benefits: Withdrawals from the EPF for housing purposes are exempt from taxes, provided certain conditions are met. This adds a layer of financial relief for employees, as they can utilize their savings without the worry of tax implications, further enhancing the appeal of the scheme.
5. Flexibility in usage: The scheme offers flexibility in terms of usage. Employees can use the withdrawn amount for purchasing a new home, constructing a house, or even repaying an existing home loan. This versatility ensures that the funds can be utilised in a manner that best suits the individual's needs.

Eligibility criteria for the Employee Provident Fund Housing Scheme

1. EPF membership: To be eligible for the Employee Provident Fund Housing Scheme, the applicant must be an active member of the EPF. This means they should be regularly contributing to their EPF account.
2. Minimum service requirement: The employee must have completed at least three years of service to be eligible for the scheme. This requirement ensures that the member has accumulated a reasonable amount of savings in their EPF account before they can withdraw for housing purposes.
3. Limitations on withdrawals: The amount that can be withdrawn is capped at 90% of the EPF balance or the cost of the property, whichever is lower. This ensures that the member retains some savings in their EPF account for future needs.
4. Property ownership: The property being purchased or constructed must be in the name of the EPF member, their spouse, or held jointly. This clause is designed to ensure that the benefits of the scheme are utilized directly by the contributing member and their immediate family.

Documentation and approval

Employees need to submit the necessary documentation, including property papers and construction plans, to the EPFO for approval. The approval process ensures that the funds are utilized for legitimate housing purposes and safeguards the interests of the members.
 

How to avail the EPF Housing Scheme?

To avail benefits under the scheme, you must apply through the EPFO portal.

1. Log in to the EPFO portal with your UAN and password.
2. Check the eligibility criteria and make sure you meet them.
3. Click on the "Claim" option.
4. In the dropdown menu, select the ‘'Form-31'. Fill and submit the form.
5. The EPFO will verify the details and, if approved, will release the funds to the member's bank account.

Utilising home loans

While the Employee Provident Fund Housing Scheme provides substantial financial support, there may still be instances where additional funds are required to complete the purchase or construction of a home. In such cases, combining the EPF Housing Scheme with a home loan can be an effective strategy.

Home loans are financial products offered by banks and financial institutions to help individuals purchase or construct homes. These loans typically come with longer repayment tenures and competitive interest rates, making them a viable option for financing significant property investments.
 

Bajaj Housing Finance Home Loan

Bajaj Housing Finance offers competitive home loan options. Employees can use their EPF savings for the initial down payment and rely on a Bajaj Housing Finance home loan to cover the remaining amount. This combination ensures that the employee benefits from low-interest rates and flexible repayment options, making home ownership more affordable and manageable.

Here are a few benefits of applying for a home loan with Bajaj Housing Finance:

1. Extended repayment tenures: Benefit from repayment periods of up to 32 years, enabling you to select a plan aligned with your financial circumstances for more manageable repayments.
2. Competitive interest rates: Initiate your journey to homeownership with attractive interest rates starting at just 7.99%*  p.a., accompanied by EMIs as low as Rs. 722/lakh*, making homeownership more affordable.
3. Tailored loan options: Customise your home loan to suit your specific requirements with flexible loan amounts and repayment terms, granting you greater control over the home-buying process.
4. Top-up loan facility: Enhance your financial flexibility with a top-up loan, providing additional funds of up to Rs. 1 crore* or higher at competitive interest rates and minimal documentation, simplifying balance transfer management.

With Bajaj Housing Finance, transforming your dream of owning a home into reality is now simpler than ever.