Overview

Construction Finance or Builder Finance is a financial solution for real estate developers who specialize in and seek funding for residential projects. Motilal Oswal Home Finance Limited (MOHFL) extends sizeable sanctions at competitive interest rates to developers, with comfortable repayment options.

Loan Type

1. Construction of Residential Projects
2. Construction of Commercial Projects and Mixed Use Projects
3. Takeover the existing loan/balance transfer from other lenders

Why Construction Finance?

Motilal Oswal Home Finance offers real estate developers the option of acquiring requisite funds for their proposed or ongoing residential construction projects against the project sales receivables. The project finance is given subject to the construction plan timelines and the verified credentials of the developer.

Features of Construction Finance

Collateral:

Escrow and hypothecation of project receivables and mortgage of property.

Tenure:

Upto 60 months.

Minimum loan amount:

Evaluation on the basis of the construction cost

Eligibility:

Evaluation on the basis of the project cash flow.

Approach for gradation of Risk:

The risk premium will be decided on a case to case basis as decided by the MOHFL. The approach for gradation of risk is based on factors such as nature of loan, credit worthiness of the borrower, nature of security, nature of the Product, type of asset being financed, borrower profile, repayment capacity, borrower’s other financial commitments, past repayment, tenure of the loan, geography (location) of the borrower, end use of the loan as represented by the underlying asset etc. Such information is collated based on the borrowers input, credit bureau and field inspection by the MOHFL officials. While deciding the interest rate and other charges, the rate offered by the Competitors in the market would also be taken into consideration.

Processing Fees:

Initial Processing Fee collected is onetime non-refundable fee, and is collected for the purpose of processing the loan application of the borrowers and the same is independent of the outcome of such processing. The same is deducted at the time of disbursement and decided case to case basis.