Housing Finance is a company engaged in the business of providing finance for housing, whether directly or indirectly. The Housing Finance Company is a type of Non-Banking Financial Company (NBFC) having the main object of providing financing of acquisition or construction of houses. Housing Finance Companies are regulated by the National Housing Bank (NHB). According to the National Housing Bank Act 1987, it is mandatory for any housing finance company to obtain a certificate of registration from the National Housing Bank.
This certificate of registration is absolutely necessary for a housing finance company to initiate activities relating to housing finance. Not doing so, is an offense as per the provisions of National Housing Bank, 1987. Certificate of registration issued is according to the category of Housing Finance Companies which are further in terms of types of liabilities, by NHB, into deposit and non-deposit accepting HFCs. National Housing Bank plays a significant role in the housing finance sector.
The Indian housing finance sector is deemed to be entering into the second phase of development in terms of integration with the capital markets and debt. All thanks to the free-market approach, NHB (National Housing Bank) placed an effective system of responsive regulation in maintaining credibility and stability in terms of resource development, policy development, and institution building of the housing finance sector in India.
In times to come, Housing Finance Companies will grow fastest as the trend is going to be bullish making a huge scope of opportunities in India. To support this statement, the past decade’s progress in the housing sector and various reports of different groups are available which will give a clear view of the future of housing finance companies in India.