photo by demibrooke

Buy land. They’ve stopped making it. - Mark Twain.

Banks and housing finance companies (HFCs) in India provide loans for purchase of plots (land). Usually, the banks/HFCs insist that the plot of land is purchased from a recognized authority like a development authority, from a society, or from a recognized developer. Financing purchase of plots is a bit risky because of difficulty in documentation.

The main requirement is that the land should be developed and clearly demarcated, and should have been approved for residential purposes. In addition to the general documentation, some additional documents are required to avail land loans. The site should not be categorized as an agricultural site as per the land records. In case it is so, permission to convert land from agricultural use to non-agricultural use should be obtained.

Documents needed to get a loan include:

• No encumbrance certificate from the registrar’s office certifying that the land is not already mortgaged.

• Layout and drawing (as approved by the city development or planning authority) of the location where the plot of land is, giving details of the precise location and its surrounding areas.

• No objection certificate (NOC) from the society for sale and transfer of land.

• Revenue receipts confirming payment of land dues to the government and tax receipts for taxes paid by the owner of the land.

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